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Pound continues to trade around a 16 month high against the euro
Published: 14 May at 8 AM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Forex, Euro Crisis, UK, Economy, Inflation,
The pound, having opened the week rising to a new 16 month high against the euro held on to the gains yesterday.
The British Retail Consortium (BRC) reported that UK retail sales rose by 4.2% in the 12 months to April 2014 on a like-for-like basis.
Helen Dickinson, Director-General of the BRC said "Retails sales growth for the 12 months to April showed a healthy increase of 2.8% compared to the 12 months to April 2013. There are now clear signs that the retail economy is expanding as retailers offer great new products at competitive prices to consumers who are still watching their spending very closely".
Meanwhile, the Chartered Institute for Personnel and Development (CIPD) reported in its Spring 2014 outlook that the net employment balance increased from a reading of +16 in the Winter of 2013 to a reading of +26 now, the highest score since the autumn of 2007 just before the credit crunch broke.
The euro was undermined after the influential ZEW economic confidence indicator for the region's biggest economy German slipped again in May with a figure of 33.1, well short of the reading of 40 that was expected by analysts. It is now trading at a 16 month low against the pound and a one month low against the US dollar.
ZEW President Prof. Dr. Clemens Fuest said "The decline of the experts’ economic expectations for Germany should be seen against the backdrop of a strong economic development in the first quarter of 2014. Already, there are indications that Germany will not be able to maintain this fast pace of growth. Nevertheless, one can assume a positive underlying trend for the economic development for the year 2014."
The US dollar also lost ground after a report showed that US retail sales rose less than expected last month with growth of just 0.1% in April following a revised 1.5% increase in March, well short of analysts forecasts for a 0.4% gain in April.
Analysts at Capital Economics said “The 0.1% month-on-month increase in US retail sales in April gets the second quarter off to a soft start and suggests that real consumption growth in the quarter as a whole may be a bit weaker than we previously expected”.
Today sees the publication of the latest UK employment data as well as the Bank of England (BoE) quarterly inflation report which will be closely watched for another indication as to when the BoE are likely to start increasing UK interest rates. Some analysts are now predicting that with the UK economy shows real and sustained signs of a recovery and a booming London property market, we may even see a first 0.25% rise in rates, which have now been stuck at an historic low of 0.5% since March 2009 this side of the next UK general election, due in May 2015.
The British Retail Consortium (BRC) reported that UK retail sales rose by 4.2% in the 12 months to April 2014 on a like-for-like basis.
Helen Dickinson, Director-General of the BRC said "Retails sales growth for the 12 months to April showed a healthy increase of 2.8% compared to the 12 months to April 2013. There are now clear signs that the retail economy is expanding as retailers offer great new products at competitive prices to consumers who are still watching their spending very closely".
Meanwhile, the Chartered Institute for Personnel and Development (CIPD) reported in its Spring 2014 outlook that the net employment balance increased from a reading of +16 in the Winter of 2013 to a reading of +26 now, the highest score since the autumn of 2007 just before the credit crunch broke.
The euro was undermined after the influential ZEW economic confidence indicator for the region's biggest economy German slipped again in May with a figure of 33.1, well short of the reading of 40 that was expected by analysts. It is now trading at a 16 month low against the pound and a one month low against the US dollar.
ZEW President Prof. Dr. Clemens Fuest said "The decline of the experts’ economic expectations for Germany should be seen against the backdrop of a strong economic development in the first quarter of 2014. Already, there are indications that Germany will not be able to maintain this fast pace of growth. Nevertheless, one can assume a positive underlying trend for the economic development for the year 2014."
The US dollar also lost ground after a report showed that US retail sales rose less than expected last month with growth of just 0.1% in April following a revised 1.5% increase in March, well short of analysts forecasts for a 0.4% gain in April.
Analysts at Capital Economics said “The 0.1% month-on-month increase in US retail sales in April gets the second quarter off to a soft start and suggests that real consumption growth in the quarter as a whole may be a bit weaker than we previously expected”.
Today sees the publication of the latest UK employment data as well as the Bank of England (BoE) quarterly inflation report which will be closely watched for another indication as to when the BoE are likely to start increasing UK interest rates. Some analysts are now predicting that with the UK economy shows real and sustained signs of a recovery and a booming London property market, we may even see a first 0.25% rise in rates, which have now been stuck at an historic low of 0.5% since March 2009 this side of the next UK general election, due in May 2015.
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Source: moneytransfer.co.uk