- EUR/GBP is flat following weaker-than-expected UK retail sales on Friday.
- UK retail sales fell 1.2% month-on-month in June, compared with the projected 0.4% decline.
- ECB President Lagarde gave no hints about the stance for the next meeting, saying September was “fully open.”
EUR/GBP is holding onto slight gains around 0.8420 during the Asian session following the release of UK retail sales data on Friday. The volume of goods sales by retailers fell 1.2% month-on-month in June, reversing the 2.9% increase seen in May, according to the Office for National Statistics (ONS). This decline was steeper than the projected 0.4%.
UK retail sales declined 0.2% year-on-year in June, compared with a 1.3% rise in May. Core retail sales also fell 0.8% year-on-year in June, from a 1.2% growth in the previous month, missing expectations. In addition, the GfK Group Consumer Confidence Index for July showed a drop to -13 from -14, falling short of the -12 forecast.
Investors have been pricing in the possibility of a Bank of England (BoE) rate cut following Wednesday’s final UK Consumer Price Index (CPI) figures, which came in line with forecasts. However, a larger-than-expected drop in UK Producer Price Index (PPI) inflation briefly put pressure on the pound.
On the EUR front, Germany’s Producer Price Index (PPI) rose 0.2% month-on-month in June, beating the anticipated increase of 0.1%. On a year-on-year basis, the PPI fell 1.6% in June, meeting expectations and improving from the previous decline of 2.2%.
On Thursday, the European Central Bank (ECB) decided to keep its main refinancing rate at 4.25%, as expected, at its July monetary policy meeting. The ECB’s deposit facility rate is also kept unchanged at 3.75%.
At the press conference following the interest rate decision, ECB President Christine Lagarde said: “The question of September and what we will do in September is totally open.” Lagarde also noted that the monetary policy decision had been unanimous and stressed the central bank’s commitment to relying on a variety of data rather than a single data point, according to Reuters.
Economic indicator
Retail Sales (MoM)
Retail sales are published by National Statistics and consist of a survey of goods sold by retailers based on a sample of shops of different types and sizes. It is considered an indicator of consumer spending. It shows the performance of the retail sector in the short and medium term. A result above the market consensus is bullish for the pound, while a result below is bearish.
Latest Post:
Fri Jul 19, 2024 06:00
Frequency:
Monthly
Current:
-1.2%
Dear:
-0.4%
Previous:
2.9%
Fountain:
Office for National Statistics
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
