- Pound (GBP) rises with UK budget in focus
- GDP forecasts and borrowing numbers in focus
- Euro (EUR) stumbles as German GDP outlook downgraded
- German GFK consumer confidence
The Pound Euro (GBP/EUR) exchange rate is holding steady after two straight days of gains. The pair settled 0.09% higher on Tuesday at €1.1870 towards the high of the day. At 05:45 UTC, GBP/EUR trades -0.01% at €1.1868.
On Tuesday the Pound initially moved higher, hitting a fresh yearly high versus the Euro before easing back. The moves came following the release of data which revealed that British retailers reported a stronger than expected rise in retail sales in October after a weaker September. The CBI monthly distributive trade survey revealed that the index rose to 30 in October, up from 11 in September and well ahead of the 13-level forecast.
However, the survey also highlighted the growing supply chain issues as the measure of stock adequacy tumbled to -23 in October, falling for seven straight months.
Finance minister Rishi Sunak could help the sector by reforming business rates tax system when he announces the autumn budget later today. Rishi Sunak is set to lay out the government’s spending and tax plans for the year.
Close attention will be paid to the Office of Budge Responsibility’s GDP forecast and overall spending levels after the government borrowed a record amount in peacetime last year.
The Euro struggled for direction in the previous session owing to a quiet economic calendar. The Euro has struggled since German finance minister Peter Altmaier announced that German 2021 GDP forecasts were downgraded to 2.6%, down from 3.5% as supply chain bottlenecks hamper the economic recovery.
The downgrade comes following a similar earning from the Bundesbank at the start of the week and ahead of German GDP figures due to be release on Friday.
The Euro will look to GFK consumer confidence data. Confidence is expected to deteriorate to -0.5 in November down from 0.3 in October. AA weaker than expected reading could drag the value of the Euro lower.