The Pound is continuing to rise versus the Euro for a third straight session on Friday. The Pound shrugged off dire PMI figures and pushed higher on Thursday to close +0.5% at €1.1464, just off from the high of the day.
At 06:30 UTC, GBP/EUR is trading +0.1% at €1.1469 as investors shrug off weak consumer confidence and look ahead to UK retail sales data and Eurozone business climate sentiment data.
GBP/EUR: UK Retail Sales To Drop -4.7%
The Pound appeared immune to the dismal data in the previous session as PMI data revealed the extent of the economic fallout from the coronavirus crisis. The IHS Markit/CPS flash composite reading fell to a record low of just 12.9, down from 30.6 in March. The scale of the collapse in the PMI readings points to a huge contraction in the second quarter.
Today Pound investors have also brushed off weak consumer confidence data. The latest survey conducted by GFK revealed that British consumer confidence hit its lowest since 2009 in April, deteriorating for the second straight month as the covid-19 crisis wreaks havoc with the economy.
Pound investors will now look ahead to the release of UK retail sales. Yesterday’s gloomy narrative is expected to be repeated today. Analysts are expecting retail sales to slump -4.7% in March, down from 0.5% increase in the previous month. Even though the retail sales data predates the PMI’s it will still be a useful indicator for gauging the scale of the hit to consumption.
Euro Look To IFO Sentiment Data
Euro slipped lower on Thursday after European leaders met via videoconference to discuss their response to the coronavirus crisis. Whilst the group managed to sign off on the Eurogroup’s proposals for emergency help, discussions over the financial response will need to continue. This area of the talks has been hampered by disagreement on how to finance aid for the worst hit economies such as Italy.
Eurozone PMI data, released yesterday showed the devastating effect that the coronavirus outbreak is having on the Eurozone economy.
Today euro investors are looking ahead to the release of German IFO business sentiment data. Analysts are expecting another steep decline.
