Over the last few days the Pound has edged away from recent highs against the Euro as a result of impressive economic reports for the Eurozone. On Friday the GBP to Euro exchange rate stayed in a narrow trading range even after the release of UK retail sales data.
The Pound experienced minimal movement as UK retail sales including auto fuel were shown to have edged up by 0.1 per cent in March rather than declining the 0.4 per cent expected.
February’s monthly sales gain was negatively revised to 1.3 per cent.
On the year sales including auto were up 4.2 per cent, considerably more than the 3.8 per cent expected.
The unforeseen increase was largely due to increased spending on clothing.
However, month-on-month sales less autos did dip by 0.4 per cent, with annual sales advancing by 4.2 per cent last month.
After the Office for National Statistics data was published economist Jeremy Cook stated; ‘Thoughts had been that consumers would take a slight pause in March from retail – a breather before the late Easter spending spree, but sales of clothing increased by 3.1 per cent on the month and took the overall average into positive territory.’
The report does appear to support the argument that the UK’s economic recovery picked up speed in the first three months of 2014.
Sales were up 0.8 per cent in the first quarter of this year following growth of 0.6 per cent in the fourth quarter of last year.
While the Pound was little-changed against the Euro after the data was published it was able to eke out a modest gain against the US Dollar.
Next week Sterling could surge against its most traded currency counterparts if the UK’s GDP report impresses.
The Bank of England believes that the UK economy expanded by 1 per cent in the first three-months of the year – the fastest quarterly expansion for several years.
If this estimate proves accurate the Pound could finally break away from its 1.20/1.21 trading range against the Euro.
Next week Pound volatility could also be occasioned by UK consumer confidence and mortgage approvals data as well as Markit construction/manufacturing PMI.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6817,
Pound Sterling,,Euro,1.2151,
Pound Sterling,,Australian Dollar,1.8136,
Pound Sterling,,New Zealand Dollar,1.9628,
US Dollar,,Pound Sterling,0.5946,
Euro,,Pound Sterling,0.8230,
Australian Dollar,,Pound Sterling,0.5513,
New Zealand Dollar,,Pound Sterling,0.5102,
[/table]
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