The Pound recovered from its daily lows versus the Euro on Wednesday, although still closed the session -0.2% lower at €1.1473 following dire UK retail sales data.
At 06:30 UTC, GBP/EUR is holding steady at €1.1483 ahead of the UK government decision day on the lock down and ahead of German inflation data.
Retail Sales Plunged By Record Amount In March
The Pound managed to pick up off the session low on Wednesday on comments by Matt Hancock, the Health Secretary, that the UK coronvirus was probably peaking. So far 12,868 people have died from coronvirus in UK hospitals. The number of daily deaths remained below 800 for a fourth day and the number of new covid-19 cases dropped 12% to 4,600.
Today the Government is expected to extend the lock down for a further three weeks, amid signs that the covid-19 curve could be flattening. However, following the dire warning from the Office of Budget Responsibility and the International Monetary Fund over the extent of the economic hit that the UK can expect, ministers are also pushing for details on Britain’s lock down exit strategy.
Retail sales figures from the British retail Consortium (BRC) laid bare the impact that the governments’ lock down measures are having on the UK high street. Sales dived 27% in the two weeks following the Government imposed lock down. Sales had soared 12% the three weeks prior as households stockpiled. The overall retail sales figure for March was -4.5%, the largest drop on record.
German Inflation In Focus
The euro advanced after Germany’s Chancellor Angela Merkel announced tentative steps to start reopening the German economy. Some smaller shops will be allowed to open as from next week and schools will gradually restart in early May. However, many aspects of public life will remain limited for weeks and months to come. Restaurants, bars and gyms will remain closed with no end date in sight. Meanwhile large gatherings, such as football matches, concerts and festivals are not allowed until at least August.
The announcement by Merkel highlights the struggle that governments will have balancing the reactivation of the economy against fears of a resurgence of coronvirus.
Today investors will look ahead to German inflation data. Analysts are predicting that inflation will show a 0.1% increase month on month in March, in the final reading, in line with the previous reading.
