- Pound (GBP) is falling after small gains yesterday
- UK construction activity expands at fastest pace in 14 months
- Euro (EUR) is rising after retail sales jump
- German industrial output fell 0.4% MoM
The Pound Euro (GBP/EUR) exchange rate is falling after modest gains in the previous session. The pair rose +0.05% in the previous session, settling on Monday at €1.1663 and trading in a range between €1.1651 and €1.1689. At 10:00 UTC, GBP/EUR trades -0.11% at €1.1651.
The euro is rising after a stronger than expected eurozone retail sales offset weaker German data.
Eurozone retail sales surged in March marking the highest increase since September 2022 amid a promising sign of economic recovery in household consumption.
Data released by Eurostat revealed retail sales in the region advanced by 0.8% month on month in March. This was after an upwardly revised decline of 0.3% in February. The figure was ahead of market expectations of a 0.6% rise.
The increase in retail sales comes as eurozone inflation has cooled to 2.4% month on month in March and as wage growth remains robust.
Upbeat numbers overshadowed ongoing signs of weakness in German industrial orders. Factory orders fell 0.4% month on month in March, defying expectations of a 0.4% increase and following a 0.8% contraction in February.
This marks the weakest level of orders since October last year and highlights ongoing weakness in Germany’s industrial sector. German manufacturing PMIs also highlighted showed a steep contraction last month.
Meanwhile, the pound was under pressure even as UK construction growth rose to its highest level in 14 months in eight pro.
The S&P Global UK construction PMI rose to 53 in April from 50.2 in March, marking the fastest growth since February 2023. The survey showed that demand was boosted by greater confidence and the UK economic outlet and also signaled a quarter-consecutive contraction in employment among construction firms. The data comes following last week’s services and manufacturing PMIs on the composite PMI, which rose to 54 in April from 52.6 in March.
Looking ahead, the Bank of England’s interest rate decision is this week, while the central bank is widely expected to leave rates unchanged at 5.25%.
