Pound euro exchange rate: GBP jumps as UK retail sales reveal shock expansion
Rhian Murphy, the Head of Retail Sales at the ONS stated: “Department stores were the only stores to show a decrease in both the quantity bought and the amount spent at negative 0.6% for both measures.
“Textile, clothing and footwear stores showed strong growth at 5.5 percent in the quantity bought as stores took advantage of the January sales, with a price fall of 0.9 percent.”
Thursday evening saw the pound rise against the euro following Theresa May’s defeat in Parliament.
Mrs May’s approach to Brexit talks were voted down, although Downing Street has said the defeat has no legal force, and it would not change the approach to talks with the European Union.
Data released yesterday revealed that Germany, the largest national economy of the Eurozone, narrowly escaped a recession.
Fourth quarter GDP data showed that the German economy had stagnated, showing 0 percent growth.
Further economic data showed that the Eurozone as a whole grew by 0.2 percent, with overall growth for the Eurozone not looking encouraging.
In the absence of further economic data from both the UK and the Eurozone, Brexit is likely going to remain the main catalyst for movement in the pairing.
Looking ahead to next week, Tuesday could see the GBP/EUR pairing rise, as the UK unemployment rate is forecast to fall to 3.9 percent.
February’s claimant count change is forecast to increase by only 2.4K compared to the previous reading of an increase of 20.8K which could further buoy the pound.
On the other side of the pairing, euro sentiment could be dampened by the release of the ZEW German economic sentiment survey for February, which is forecast to contract further, to -18.4.
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