Eurgbp Holds Ground

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Eurgbp Holds Ground

Eur/Gbp Holds Ground Above 0.8400 Post Uk Retail Sales

EUR/GBP is holding its ground above the 0.8400 support after the release of the UK retail sales data. The overall data showed a 1.2% m/m decline in the volume of goods sales, lower than the +2.9% increase seen during May 2024.

The data from the ONS has shown a rather weak retail sales figure in the United Kingdom. As a result of this, an upside was seen in the EUR/GBP, as the GBP came under pressure after retail sales data.

Uk Retail Sales Decline In June

If we look at retail sales on a y/y basis, around 0.2% decline was witnessed in June compared to May's increase of 1.3%. Similarly, core retail sales also declined by -0.8%, while the previous month showed healthy growth.

Another thing that led to the upside in EUR/GBP was the UK's consumer confidence index (GfK), which moved from -13 to around -14.

Meanwhile, there's a higher chance of a rate cut from the Bank of England as the UK retail sales were alarming for everyone. Amidst all of this, the PPI inflation has also shown a rather steep decline, yet another reason behind the decline in the GBP.

If we look at Europe's side, Germany's PPI has gone up by 0.2% m/m in June, higher than the 0.1% forecast. Similarly, the PPI on a y/y basis declined by 1.6% during June, which is similar to the forecasts made by experts.

At Thursday's meeting of the ECB, the interest rate was unchanged at 4.25, which is in line with the forecasts. Similarly, the deposit facility rate is also kept at 3.75%, similar to the forecasts.

Christine Lagarde, president of the ECB, also offered some clarity at a press conference. She added that they have yet to decide on what to do at the September meeting of the ECB. As for the monetary policy decisions, Christine Lagarde made it clear that their decisions are unanimous as they are relying on a large set of data.

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