- Pound (GBP) finds support from encouraging Brexit comments
- CBI data reveals a worrying decline in retail jobs
- Euro (EUR) traded mixed versus major pairs even after improving German GDP & IFO business conditions
The Pound Euro (GBP/EUR) exchange rate is extending gains for a second consecutive session. The pair settled on Tuesday +0.25% at €1.1110 in the middle of the daily traded range. At 05:15 UTC, GBP/EUR trades +0.07% at €1.1117.
The Pound is moving mildly higher as investors shrug off those Brexit fears which had been lingering since the end of last week and focused on Brexit positive news flow. Irish leader Michael Martin said that he had a positive gut instinct surrounding a Brexit deal after meeting Boris Johnson for the first time since being elected in June.
Any gains in sterling are being capped after data from the Confederation of British Industry highlighted a concerning trend. Employment in the retail sector fell at its fastest pace since the financial crisis in August. The CBI survey covered a period when big names such as Debenhams, WH Smiths and Dixon Carphone announced thousands of job losses.
With the government withdrawing its support from the job retention scheme over the next couple of months, there is a good chance that these statistics are going to get worse.
The Euro traded mixed versus its major peers in the previous session. Better than forecast German GDP figures along with an upbeat German IFO business climate survey helped buoy the common currency.
The German economy shrank by -9.7% in the second quarter, a slight improvement on the -10.1% contraction initially expected but still the deepest downturn on record.
German Business confidence also improved in August according to the IFO institute. The business confidence index rose to 92.6 this month up from 90.4 in July. This was not only above analysts’ expectations but also marked the fourth month that confidence rose.
The survey shows that companies asses their current business situation to be more positive than last month. The data indicates that the German economy is on the road to recovery.
There is no high impacting Eurozone data due for release today.
