- Pound (GBP) rose on Friday for a second day
- UK house prices rose 2.4% YoY
- Euro (EUR) fell on Friday but rose across the week
- German retail sales rebounded 0.2% MoM
The Pound-Euro (GBP/EUR) exchange rate rose for a second day on Friday. The pair rose 0.01% in the previous session, settling on Thursday at €1.1374. It traded between €1.1345 and €1.1383. At 21:00 UTC, GBP/EUR traded +0.26% at €1.1404. The pair fell 0.43% across the week, the second straight weekly decline.
The pound gained for a second day on Friday but was still on track for a weekly decline against the euro, marking the second straight week that the pound has fallen against its European counterpart.
The pound was lifted on Friday by an upbeat market mood and by data showing that UK house prices rose in October, suggesting that the housing market was holding up in the run-up to Rachel Reeves’ budget.
House prices rose by 2.4% compared to a year earlier, up from a 2.2% rise in September. This is above forecasts of 2.3%.
The increase comes against the backdrop of subdued consumer confidence and signs of weakening in the labour market, suggesting resilience in the housing market, especially given that mortgage rates are still high.
The Bank of England interest rate decision will be closely watched next week; however, the central bank is widely expected to leave rates unchanged at 4%. The market will be looking for any signs that the Bank of England is more concerned about the economy’s outlook, amid expectations that the Chancellor will hike taxes in her budget on November 26.
The EUR fell on Friday but gained across the week as the ECB left interest rates unchanged.
On Thursday, the ECB rate decision showed that policymakers believed that policy was in a good place.
Data on Friday showed that German retail sales rose 0.2% month on month in September, in line with expectations and up from a revised 0.5% decline in the previous month.
It is the first monthly increase since June and came thanks to a 0.3% increase in food sales and a 0.4% gain in online and mail order businesses. However, non-food sales fell by 0.6%
