- Pound (GBP) ticks higher after flat finish on Tuesday
- BRC retail sales rise to highest level in 7 years
- Euro (EUR) under pinned by upward revision to German GDP
- German IFO business climate survey due
The Pound Euro (GBP/EUR) exchange rate is ticking higher on Wednesday. The pair settled flat on Tuesday at €1.1676 just 10 pips in the middle of the daily traded range. At 05:45 UTC, GBP/EUR trades +0.08% at €1.1686.
The Pound was well matched versus the Euro in the previous session following upbeat data from both the UK and the Eurozone.
UK retail sales surged in August with British retailers seeing the biggest surge in spending in almost seven years and orders hitting new highs according to industry data. The Confederation of Brutish Industry’s retail sales measure jumped to 60, its highest level since December 2014 and up from 23 in July. Pent up demand from the pandemic is still coming through in the data. However, this is expected to settle in the coming months.
There is no high impacting UK data due for release today. However, investors will continue to keep an eye on COVID numbers as new daily cases remain elevated as deaths hit the highest level since March 24.
The Euro was also well supported in the previous session following an upward revision to German economic growth in the April – June period. German GDP was revised higher to 1.6% quarter on quarter. On an annual basis, GDP was revised upwards to 9.4% up from 9.2%.
The stronger growth was mainly thanks to household and government spending. Despite the better-than-expected rise in GDP the German economy is still 3.4% below its pre-pandemic level in Q4 2019.
The German manufacturing sector continues to experience supply bottlenecks and chip shortages which is holding back the rate of growth.
Today attention will turn to the IFO business climate survey which is expected to show a very mild easing in morale from 100.8 in July to 100.4 in August. Meanwhile the expectations component is expected to ease from 101.2 to 100. A weaker than forecast reading could drag on demand for the Euro,