- Pound (GBP) awaits next catalyst
- A quiet week for UK economic calendar
- Euro (EUR) weighed down by weak retail sales at the end of last week
- German factory orders in focus
The Pound Euro (GBP/EUR) exchange rate is treading water at the start to the week after a flat finish across the previous week. The pair finished last week at approximately the same level that it started at €1.1661. At 05:45 UTC, GBP/EUR trades +0.03% at €1.1664.
The Pound struggled to gain ground across the previous week amid a light economic calendar. The final services and manufacturing PMIs were released and disappointed. The services PMI was downwardly revised to 55 in August from 55.5 in the flash reading as services were hit by “Pingdom” when huge numbers of people were being told to isolate by the National Health Service’s app.
This marked the third monthly slowdown in services activity growth. Brexit continues to create a headwind for businesses contributing to supply shortages and logistics.
Coronavirus concerns also continue to linger as the number of new daily cases remains elevated above 35,000 and as the death toll slowly creeps higher.
There is no high impacting UK data due to be released today. This week as a whole is quiet as far as economic data is concerned, the highlight isa likely to be UK GDP on Friday.
The Euro traded relatively flat across the previous week, coming under pressure on Friday following a larger than expected decline in retail sales across the Eurozone. Sales dropped -2.3% in July compared to the month earlier according to Eurostat. The number was mainly driven by a steep decline in sales in Germany, although France and the Netherlands also saw sales decline. The disappointing number came after a strong June print of 1.5% as the shops re-opened.
Retail sales have been notably volatile recently. However, they support the view that growth momentum in the bloc is fading.
Today attention is on German retail sales. Analysts expect sales to decline -1% month on month in July after surging 4.1% in June.