Elevated rate hike bets from the Bank of England (BoE) could be keeping Sterling supported. However, despite the dent in confidence, inflation still remains sky-high, with market participants expecting further tightening beyond the June policy meeting. But, with signs that inflation has possibly peaked, retailers are hopeful that confidence will continue to improve.’ Helen Dickinson, Chief Executive of the British Retail Consortium (BRC) commented: ‘With consumer confidence still recovering from record depths, and continued tightening of household incomes, we are unlikely to see substantial sales growth in the coming months. Despite multiple bank holidays and good weather, non-essential spending was reduced. Marking the slowest pace of growth in seven months, the British Retail Consortium (BRC) reported that a considerable slowdown of consumer spending. Against expectations of a 5.2% increase, same as the previous month, retail sales only grew 3.7% on a yearly basis up to April. Despite growing MoM, sales volumes fell by the lowest level of expansion since October 2022. Meanwhile, the Pound (GBP) also struggled with their own stuttering retail sector. ‘It is reassuring to see the first signs of recent monetary policy actually being transmitted to the real economy.’ Pound (GBP) Exchange Rates Kept Afloat by Rate Hike Bets Echoing these sentiments was European Central Bank (ECB) policymaker Klaas Knot as he appeared cautious on the central bank’s forward guidance: Reduced interest rate hike bets were severely pared in the wake of the disappointing data. A stagnation of retail sales, compared to an expected 0.2% climb were met with zero growth as food, drink, and tobacco sales fell drastically. Meanwhile, retail sales also disappointed to the downside, and soured the confidence in the single currency. The second consecutive month of declining industrial orders weighed on the Euro. The Euro (EUR) struggled for sustained demand on Tuesday amid worse-than-expected retail sales and German factory orders.Īgainst expectations of a rebound in factory activity after plummeting 10.9% last month, factory orders in Europe’s largest economy unexpectedly dropped by 0.4% MoM in April. Euro (EUR) Exchange Rates Undermined by Disappointing Data The Pound to Euro rate wavered as both retail sectors in the UK and Eurozone disappointed, highlighting stuttering sectors. The Pound Euro (GBP/EUR) exchange rate held firm into Thursday's Wednesday's session on currency markets, with Sterling drifting against both the Euro (1.16271 EUR) and the US Dollar (1.24574 USD).Īt the time of updating, GBP/EUR was seen trading at €1.16249, relatively unchanged on the previous days close. Itemprop="thumbnailUrl" width="1200" height="900" class="img-responsive img-rounded"/>
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