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GBP/EUR Exchange Rate Slips despite Disappointing Eurozone Data

Last week’s high: €1.1165

Last week’s low:  €1.1039

 

Euro Bolstered by Eurozone Unemployment Falling to 10-Year Low

Last Monday saw the release of German retail sales for November, which showed a better-than-expected jump from -0.3% to 1.4%, causing the Euro to rise against Sterling at the start of the session.

The release of the Eurozone’s business climate for December slipped further than expected to 0.82 from 1.04, although despite this poor figure from the Eurozone, this did little to stop the Pound sliding against the Euro on Tuesday.

With Parliament returning to Brexit debate last week, the date of the ‘meaningful vote’ is set for tomorrow. Theresa May’s failed attempt at gaining the support of the Democratic Unionist Party (DUP), who dismissed her proposals regarding the Northern Irish backstop as ‘meaningless’.

November’s Eurozone unemployment figures were released on Wednesday, showing that jobless levels had hit a 10-year low of 7.9%.

Further causing the Pound to fall against the Euro last week was the release of the UK’s like-for-like retail sales which showed that retailers had suffered their worst Christmas in a decade.

The UK saw a rise of 0.2% in GDP for November, a higher-than-expected reading, with the services and construction output growing, although the industrial sector contracted by 0.4%.

 

EUR Outlook: Strong Eurozone Data to Give EUR the Upper Hand?

The start of this week’s session will see the release of the Eurozone’s seasonally adjusted industrial production figures for November, with forecasts suggesting that industrial production is going to contract by -1%, which could see the Euro slip against Sterling.

The Parliamentary vote on Theresa May’s Brexit Withdrawal Act could cause the Pound to plummet if MPs vote against the deal tomorrow.

Wednesday will see the release of Germany’s harmonized index of consumer prices for December, which is forecast to hold steady at 1.7%, which could buoy the Euro.

The Pound Euro exchange rate could continue to fall on Friday as the British retail sales figures contract in December compared to November as predicted.

 

Key Events

14th January

10:00   EUR Industrial Production s.a. (Nov)

15th January

n/a       GBP UK Parliamentary vote on Brexit

07:45   EUR Consumer Price Index (Dec)

16th January

07:00   EUR Harmonised Index of Consumer Prices (Dec)

09:30   GBP Retail Price Index (Dec)

09:30   GBP Consumer Price Index (Dec)

09:30   GBP Core Consumer Price Index (Dec)

17th January

10:00   EUR Consumer Price Index (Dec)

18th January

09:30   GBP Retail Sales (Dec)

 

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To keep up to date with the Euro, visit the EUR blog in our Currency News section.

Alastair Archbold

Foreign Exchange Manager

aja@fcgworld.co.uk

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