The pound continues to remain under pressure against the Euro despite some positive UK releases this week which helped see a small but short lived boost higher for sterling exchange rates. GBP EUR strengthened yesterday following much better that expected retail sales date for the month of July and which gives us some clues as to the economic landscape post Brexit.
Retail sales were up 1.4% on the month of June which was considerably stronger than expected and resulted in the pound gaining a cent against the Euro immediately after. It was a hot month in July so sale were likely to be strong so I wouldn’t read too much into it at this stage.
There is still a real chance that Britain may have a technical recession which could see trouble for the pound in the coming weeks and months although there is a growing consensus that Britain may in fact narrowly avoid a recession. This would be very good news for the pound although we still have some way to go.
There was other positive news earlier in the week with unemployment remaining at 4.9% covering April to June and which highlighted that unemployment did not worsen in the run up to the referendum. In fact the claimant count measure of unemployment actually improved for the month of July (post Brexit).
Data is light for the UK as we end the week but next week sees very important UK Consumer Price Index inflation numbers which could result in high volatility for the pound. Inflation is likely to start ticking higher in the next couple of months as a result of the weaker pound as a result of Brexit. As such there is likely to be considerable market reaction when it does and any high numbers are likely to see the pound move higher.
Client looking to sell Euros may wish to consider taking advantage of the current excellent trading prices which are still hovering around a three year high for EUR GBP.
If you have an upcoming GBP or EUR currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on [email protected]