- Pound (GBP) lifted by vaccine rollout & reopening optimism
- UK retail sales expected to show -2.5% MoM
- Euro (EUR) pressurized by dovish ECB
- Eurozone consumer confidence rose more than expected
The Pound Euro (GBP/EUR) exchange rate is holding steady on Friday after strong gains across the week. The pair settled +0.4% higher on Thursday at €1.1553 after reaching just shy of €1.1573 earlier in the session. At 05:15 UTC, GBP/EUR trades flat at €1.1553. The pair is set to gain 1.1% across the week and it already trading 2.3% higher in February.
The Pound is one of the top major performers of the week. Expectations surrounding the rapid UK covid vaccination programme continues to be a key driver for the currency. 16.4 million first doses of the covid vaccine have now been administered and the focus is now on the reopening of the economy.
Attention will now turn to UK retail sales data which is due to be released early in the European session. Analysts are expecting retail sales to plunge in January as all except essential shops shut their doors for the third national lockdown. Looking back to the second national lockdown in November retail sales plunged -3.8%. Forecasts for January are for -2.5% contraction month on month.
The Euro came under pressure after the latest minutes from the European Central Bank meeting confirmed that central bank’s dovish stance which overshadowed a slight improvement in consumer confidence in the region.
According to the minutes of the latest ECB meeting policymakers committed to sticking with stimulus despite a recent uptick in inflation disregarding any short term spikes in inflation. The minutes support the view that the ECB are hoping to avoid any policy change for much of the year.
Eurozone consumer morale rose by more than expected in February according to data from the European Commission. Confidence picked up 0.7 points to -14.8 points. Economists had expected a rise to -15 points from -15.5 in January.