- Pound (GBP) rose despite worries over retail sales outlook
- No UK economic data due today
- Euro (EUR) fell as energy fears
- German consumer confidence data due
The Pound Euro (GBP/EUR) exchange rate is falling after three days of gains. The pair rose 0.9% in the previous session, settling on Tuesday at €1.1885, after trading in a range between €1.1772 – €1.1901. At 05:45 UTC, GBP/EUR trades -0.06% at €1.1876.
The pound rose against the euro but fell against the US dollar in the previous session. Data showed that British retailers are downbeat about the outlook for the coming month amid the ongoing cost of living crisis according to the Confederation of British Industry.
The Confederation of British Industry retail sales data edged up from -5 to -4 for July but expectations for the coming month saw the index drop to -14, the weakest reading since March 2021 when most shops were still being impacted by the lockdown.
There is no high impacting UK economic data today. In fact, there is little for investors to sink their teeth into this week data-wise.
The euro fell in the previous session amid growing fears over energy security in the region. The European Union reached a political agreement to cut their gas use by 15% from August until March amid rising expectations of a full Russian gas cut-off.
The agreement comes after Russia’s state-owned Gazprom announced that it will cut supplies through the Nord Stream 1 to just 20% of its capacity. Russia is claiming that this is due to a technical issue. However, the West considered that this is Moscow weaponizing gas.
Gas prices in Europe jumped 30% in just two days after Russia deepened supply cuts. This will mean that inflation will remain elevated as well.
The news comes after data showed that German business sentiment dropped to a 2 year low in July over concerns over gas supply and rising prices.
Today attention will be on German GFK consumer confidence which is expected to deteriorate further in August, falling to -29 down from -27.4.