In contrast to the last few days of trading, where depleted Euro sentiment had been keeping GBPEUR above the 1.2000 watermark; today, the pound came crashing down to Earth based on its own state of affairs over that of the single currency.
At 09:30 GMT this morning, more crucial retail sales figures are due to be released for the UK covering the month of January. Data releases such as this are always important focus points for currency traders, with the UK’s being even more in the frame as crucial inflation figures follow along at the same time tomorrow. These two reports will dictate the movements of GBP in the short-run, with the continuing friction generated between the UK and EU’s negotiators offering little by the way of encouragement regarding compromise in trade talks.
Essentially, the pound needs an alignment of a rebounding retail sales figure, to make up for the abysmal Christmas spending numbers, and a positive inflation number to encourage incoming Bank of England Governor Andrew Baily to not cut interest rates. If both of these align, we could push above the 1.2000 mark and look to hold the gains. Overnight, the market shed 1% on GBPEUR and 1.1% against GBPUSD in anticipation of the figures this morning.
Have a great day,
Author: Joshua Haden-Jones, Senior Relationship Manager
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