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Euro Pound (EUR/GBP) Exchange Rate Rises as UK Retail Sales Fall to Record Lows

EUR GBP Exchange Rate

EUR/GBP Exchange Rate Rises as US-UK Tensions Hold Back Sterling’s Gains

The Euro Pound (EUR/GBP) exchange rate rose by 0.3% today, with the pairing fluctuating around £0.8989 on the interbank market.

The Pound (GBP) fell against the Euro (EUR) following this morning’s publication of the yearly BRC like-for-like retail sales for June.

These fell to record lows by -1.6%, their worst since records began in the mid-1990s.

Helen Dickinson, the Chief Executive at BRC, commented:

‘Overall, the picture is bleak. Rising real wages have failed to translate into higher spending as ongoing Brexit uncertainty led consumers to put off non-essential purchases. Businesses and the public desperately need clarity on Britain’s future relationship with the EU.’

US-UK tensions have also risen following the leak of the British ambassador to Washington, Sir Kim Darroch’s comments about President Donald Trump, who called the leader ‘inept’ and ‘dysfunctional’.

As the US is the UK’s closest ally, this has caused concerns for post-Brexit trade negotiations, lowering market confidence in Sterling.

Euro to Pound (EUR/GBP) Exchange Rate Edges Higher Following Better-than-Expected German Industrial Figures

The Euro, meanwhile, edged higher following yesterday’s better-than-expected German industrial production figures for May.

These increased above the -0.4% forecast to 0.3%.

Germany’s Federal Statistical Office, stated:

‘After a weak April, production in the manufacturing sector stabilized at a low level in May. [This shows a] clearly subdued industrial economy, which is likely to continue in the coming months in view of weak incoming orders and the subdued business climate.’

Germany’s trade balance figures for May also improved, rising about the consensus 18.6bn to 18.7bn.

Today, however, saw the Italian retail sales figures for May, which fell below consensus to -0.7% –their fourth consecutive drop.

This has caused some concern for Euro traders, as Italy is the third-largest economy in the Eurozone, and any signs of a struggling economy – which it is currently undergoing – is leaving European currency traders feeling jittery.

EUR/GBP Forecast: UK Manufacturing Data in Focus

Pound traders will be looking ahead to tomorrow’s UK manufacturing and industrial figures for May.

Tomorrow will also see the printing of the UK growth figures for May, which are expected to rise from -0.4% to 0.3%.

As they’re expected to improve, we could see the EUR/GBP exchange rate begin to edge higher.

Euro investors, meanwhile, will be awaiting tomorrow’s German 10-year bond auction figures.

Any signs of improvement could provide some further uplift for the single currency.

The Euro Pound (EUR/GBP) exchange rate will, however, remain fixated on political developments, with Brexit and the ongoing Tory leadership race remaining in focus.