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Euro Pound Exchange Rate Rallies as UK Retail Sales Crash

The Euro has jumped by 0.5% against the Pound today, thanks to a jump in Eurozone construction as well as a highly disappointing set of UK sales stats.

  • EUR GBP trading falls to 0.85 – GBP EUR rate rises to 1.17
  • Eurozone construction up 3.2% in December – Economists predict missed Greek debt deadline
  • Pound shattered by retail sales slump – Inflationary pressure signs grow
  • Euro losses forecast if Greek debt deal isn’t reached on Monday – Pound turbulence expected on Lords’ Article 50 debates

Eurozone construction output in December jumped from 0.6% to 3.2%, facilitating a Euro Pound advance today. However, the Euro’s appreciation against the Pound today comes at a troubling time for the Eurozone, where the Greek debt crisis remains a pressing issue for officials to solve.

It is broadly forecast that Eurozone finance ministers will be unable to meet the coming Monday’s agreement deadline, which might mean that the Euro Pound rate drops in future when the bailout talks get dragged into imminent Dutch and later French general elections.

At the present time, the Pound has been extremely soft against the Euro, owing to January’s retail sales missing predictions on the month and the year. As well as monthly sales remaining negative, annual figures have shown larger-than-expected slowdowns; this has indicated that further pressure on UK consumers is incoming due to slowing wage growth and rising inflation.

Aside from a meeting of G20 foreign ministers in Bonn today, the next major Eurozone news is expected to be the Eurozone February consumer confidence flash on Monday.

This previously dropped to -4.7 points and is expected to worsen to -4.85 on Monday afternoon, which could trigger a Euro Pound slump.

Monday is also the deadline for reaching an agreement in Greek debt talks. If the Greek Government and its creditors remain at odds, then the Euro is expected to be heavily devalued due to more pressing Eurozone elections taking precedence among EU leaders and officials.

Monday will additionally see Article 50 bill debates restart, which have a high chance of triggering Pound Euro volatility.

The bill has now been moved onto the House of Lords and unlike previous efforts in the Commons, a more significant opposition is expected to be thrown up.

If the Lords successfully implement amendments to the bill, the Pound could appreciate, given that it could lead to a less traumatic parting of the UK from the EU.

The first UK ecostats next week will be Monday’s Confederation of British Industry (CBI) trends score for industrial orders, which previously posted 5 points.

Current EUR GBP Interbank Exchange Rates

At the time of writing, the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.85 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.17 today.