- Pound (GBP) falls after 4 days of gains
- Next indicates clothes inflation could fall
- Euro (EUR) rises after German GFK consumer confidence rises
- German inflation data is due tomorrow
The Pound Euro (GBP/EUR) exchange rate is falling after four days of gains. The pair rose 0.02% yesterday, settling on Tuesday at €1.1377, after trading in a range between €1.1352 – €1.1404. At 08:45 UTC, GBP/EUR trades -0.10% at €1.1366.
The pound falling as British retailer Next said that it expects clothing inflation to ease. The fashion retailer which is often considered a bellwether reported that it had seen easing price pressures amid a significant reduction in shipping costs and slower price increases at the factory gate.
As a result, Next now expects price inflation of its products to be 7% over the spring and summer before dropping to 3% in the autumn and winter this is down from 8% and 6% previously expected.
Signs of slower inflation will be well received by the Bank of England and come after data yesterday showed that food inflation rose to a record high in March up 15% owing to a shortage of fruit and vegetables.
There is no high impacting UK economic data today. Tomorrow the Bank of England is due to release its quarterly bulletin which investors will be looking at carefully for clues over the health of the UK economy and where the central bank sees the future path for rate hikes.
The euro is rising the data shows that consumer sentiment in Germany is set to improve further in April. the GfK consumer confidence index rose to -29.5 up from -30.6. This marked the sixth straight month of improving confidence in the eurozone’s largest economy and comes as energy prices continue to fall.
The data comes after a surprise jump in the IFO German business climate suggesting that confidence in the country is improving.
There is no high impacting eurozone economic data due to be released today instead investors will look ahead to German inflation figures which are due to be released tomorrow investors will be hoping to see inflation continue to cool.
