- Pound (GBP) is flat but is set to rise across the week
- Positive sentiment boosted GBP, amid a quiet calendar
- Euro (EUR) is unchanged after mixed retail sales data
- Sales slowed on a weekly basis, but accelerated annually
The Pound-Euro (GBP/EUR) exchange rate is holding steady for a second day. The pair fell -0.02% in the previous session, settling on Thursday at €1.1526. It traded between €1.1504 and €1.1536. At 17:30 UTC on Friday, GBP/EUR trades -0.01% lower at €1.1525. The pair is on track to rise over the week, marking the fourth consecutive weekly gain.
The pound is unchanged on Friday, posting gains across the week, supported by positive risk sentiment and despite a quiet UK economic calendar.
Global stock indices have risen throughout the week, even as geopolitical uncertainty has increased following the US intervention in Venezuela.
While the UK economic calendar has been quiet this week, attention is now turning to next week, which includes the release of UK unemployment data and GDP figures.
The unemployment rate in the UK has ticked up to 5.1%, its highest level since the pandemic, and could continue to rise as firms struggle amid financial pressures from high interest rates, a higher minimum wage, and a heavier tax burden following the rise in employer NI contributions.
Further weakness in the UK labour market could prompt the Bank of England to cut interest rates more aggressively in 2026, limiting upside for the pound.
The euro is unchanged after mixed retail sales data. November retail sales rose 0.2% month-on-month, ahead of the 0.1% forecast. However, this was down from 0.3% in October. On an annual basis, retail sales rose 2.3%, up from 1.9%. The increase in sales comes despite a cautious consumer backdrop.
Consumer confidence fell for the second consecutive month in December alongside weaker expectations for future household finances and the overall economic outlook.
Broadly speaking, consumption in the eurozone has remained weak since the COVID-19 pandemic, which lifted prices and drove interest rates steeply higher, encouraging households to save rather than spend.
Looking at individual countries, consumer spending in France, the eurozone’s second-largest economy, fell in November compared with the previous month. Retail sales also slipped in Germany on a monthly basis.
