- Pound (GBP) is steady after losses yesterday
- Retail sales rose 0.2% MoM vs 0.5% expected
- Euro (EUR) holds steady after gains yesterday
- Trump warned of trade tariffs on Europe
The Pound Euro (GBP/EUR) exchange rate is holding steady after losses yesterday. The pair fell -0.69% in the previous session, settling on Thursday at €1.2060. It traded in a range between €1.2058 and €1.2163. At 16:00 UTC, GBP/EUR trades 0.03% at €1.2064.
The pound is unchanged after UK retail sales rose less than expected in November. According to official data, retail sales rose 0.2% month over month in November as consumers recovered from a loss of confidence in the previous month ahead of the government’s first budget.
However, the 0.2% increase was still less than the 0.5% increase that economists had expected. However, it was a vast improvement on the 0.7% full in October ahead of Rachel Reeves spending in tax plans.
The monthly increase in sales was the first seen since August. However, sales volumes were just 7.3% across the three months, marking the weakest three months since Jane.
The data comes after the Bank of England left interest rates unchanged at 4.75% yesterday and forecast that the economy would experience 0% growth in the year’s final quarter. Despite the weak growth outlook, policymakers didn’t vote to cut rates owing to stubborn inflationary pressures.
After yesterday’s gains, the euro is holding steady against the pound. However, the upside will likely be limited, given that the ECB is expected to continue cutting interest rates in 2025.
The ECB reduced rates in last week’s meeting and is expected to cut rates further as inflation remains under control around the 2% target level and amid concerns over the growth outlook.
President-elect Trump wants Europe to up US oil and gas imports or face tariffs on the bloc exports.
Europe is already a major buyer of US oil and gas exports, and the US is currently at exporting capacity. Still, Trump has pledged to further grow US oil and gas production.