Tuesday has opened with continued Euro to Pound weakness, following a higher-than-expected rise in UK reported sales. The annual British Retail Consortium (BRC) retail sales figures showed a jump of 5.6% in April, much better than the forecast 0.5%.
There were caveats to this news, however, as Barclaycard Managing Director Paul Lockstone pointed out;
‘A late Easter and rising prices provided a superficial boost to spending in April, but behind the headline figure it’s clear consumers are responding to the inflationary pressures on household budgets. Despite growth across a number of categories, the spending picture is one of growing caution, as seen by declining confidence levels amongst the UK’s consumers’.
(Last updated 16:40, May 8th, 2017)
Monday afternoon’s trading session has seen the Euro remain soft against the Pound, dropping by -0.3% in the pairing. As Emmanuel Macron basks in his election victory, traders have already been focusing on the June elections.
Forecasts have been positive for Macron’s initial efforts, with Harris Interactive and Kantar Sofres polls estimating between 24-26% support for Macron’s cause in the June votes.
Having a strong house behind him would embolden Macron and allow more decisive action to be taken, which could strengthen the Euro by extension.
(First published 09:48, May 8th, 2017)
The Euro has dipped slightly against the Pound today, following Emmanuel Macron’s landslide victory in the French Presidential election.
- EUR GBP trades down at 0.84 – GBP EUR rate advances to 1.18
- Euro dips after initial election boost – Macron’s power in national assembly remains unclear
- Pound rises as UK billionaires increase under Brexit – Uncertainty about Macron stance in Brexit talks
- German trade balance stats ahead – Growth in UK sales forecast
The Euro to Pound (EUR GBP) exchange rate initially jumped when Macron’s 66% share of the vote was announced, pushing the Euro to almost 0.85 against the Pound.
This outcome was widely predicted by the polls, however; traders had also ‘priced in’ the outcome, which prevented much Euro volatility.
Although there is a general sense of relief across the EU at the result, the Euro has still dropped over fresh fears for the fledgling Macron presidency.
As well as implementing his vision of a united and EU-integrated France over the coming months and years, Macron also faces a potential upset in June’s legislative elections.
These will decide the makeup of the national parliament, but if the main parties reject Macron’s vision then he could be in for 5 years of stiff opposition.
A recent Sentix investor confidence score has risen for May. This bodes well for the Eurozone, but the result has not been enough to trigger a EUR rally.
The Pound’s slight appreciation against the Euro comes after the announcement that the number of UK billionaires has increased since the EU Referendum.
The news has been given a mixed reception. On the positive side, it shows that the nation is still ‘open for business’, with economic expansion high. Less supportively, Equality Trust Executive Director Wanda Wyporska has highlighted present inequalities;
‘The super-rich continue to streak away from the rest of us, while the poorest see their wealth shrink. This is an economy working for the few, not the many’.
A Pound to Euro rally has been prevented today by Macron’s election victory. Some have voiced concern that this result will lead to a more unified EU against ‘Brexit Britain’.
The next Eurozone news will be Tuesday’s German trade balance for March. If the current surplus figure expands, the Euro could be pushed higher.
Pound movement could follow Tuesday’s British Retail Consortium (BRC) sales figure. Covering annual reported sales in April, the figure is forecast to grow by 0.5%. This could boost Sterling demand, given that the yearly result for March showed a -1% contraction.
Current Interbank EUR GBP Exchange Rates
At the time of writing, the Euro to Pound (EUR GBP) exchange rate was trading down at 0.84 and the Pound to Euro (GBP EUR) exchange rate was trading up at 1.18.