The Pound jumped beyond 1.21 against the Euro on Friday after the currency was bolstered by the release of good retail sales data and as the single currency came under pressure from a weak construction output report.
The Pound has gained against the majority of its peers after data released by the Office for National Statistics showed that retail sales in the UK leapt by 2.6% in December smashing economist forecasts for a 0.3% gain.
Strong sales at smaller businesses were the driving factor and department stores saw sales climb by 8.7%. On a year by year basis sales soared by 5.3%. Excluding fuel sales the figure rose by 2.8% monthly and 6.1% yearly.
“This is a strong economy and there will be buyers of sterling. It’s a whopping number for December, the strongest on record. Despite the magnitude of the data we estimate this will only add 0.2% to fourth quarter gross domestic product for the fourth quarter,” said a London based foreign exchange strategist.
The Euro meanwhile was weighed down by the publication of weaker than expected construction output data. According to Eurostat, construction output declined by -0.6% from October’s figure and fell by -1.7% from the previous year, a figure that was worse than the -1.28% economists had been forecasting.
Eurostat said that, while work on civil engineering projects increased over the month, construction of residential and commercial buildings declined. Construction fell in Germany and Italy, but picked up in Spain and France.
Euro Exchange Rate
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling ,,Euro,1.2106 ,
US Dollar,,Euro,0.7363 ,
Australian Dollar,,Euro,0.6472 ,
Canadian Dollar,,Euro,0.6721 ,