- Pound (GBP) fell last week after mixed data
- UK PMI data tomorrow is in focus
- Euro (EUR) fell after the EC downwardly revised inflation projections
- Eurozone consumer confidence data is due
The Pound Euro (GBP/EUR) exchange rate is rising at the start of the week after losses last week. The pair fell -0.28% last week, settling on Friday at €1.1253, after trading in a range between €1.1197 – €1.1363. At 05:45 UTC, GBP/EUR trades +0.07% at €1.1261
While the pound pushed higher on Friday after stronger-than-expected UK retail sales, sterling actually fell across the previous week. Retail sales unexpectedly Rebounded in January in a sign of consumer resilience. Retail sales rose 0.5% month on month in January after falling 1.2% in December. However, compared to the previous January, sales were still down by 5.1%, marking the 10th straight month of falling sales on annual terms.
The data came after figures showed that the UK jobs market remained strong with a tight labour market driving wage growth—meanwhile, inflation cooled by more than forecast.
Despite plenty of UK economic data being released last week, the data was mixed, making it difficult to draw conclusions about the Bank of England’s path for future interest rate rises.
Today there is no high impacting UK economic data. Investors will look ahead to the release of business activity figures on Tuesday for further clues over the health of the UK economy.
The euro pushed higher in the previous week after hawkish comments from European Central Bank Governor Christine Lagarde and several other ECB members indicating that a 50 basis pointr rate hike at the March monetary policy meeting is still likely.
Separately, gas prices in Europe have fallen to lower than before the Russian war thanks to a milder winter, ample storage and efforts to source alternative supplies. The lower gas prices fuels optimism that the region could avoid a deep recession.
Today investors will be looking at eurozone consumer confidence which is expected to improve to -18.3 up from -20.9. This would mark the fifth straight month of improving confidence.
