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EUR/GBP hit an intraday high of 0.8545 in early London trade on Friday, helped by weak UK data. The cross also found support from recent easing fears of an economic slowdown in the euro zone and Germany. Overall, the market downturn and cautious sentiment ahead of key events this week saw the pair post its first gain in six sessions while bouncing off a five-week low.
UK retail sales fell 1.4% year-on-year in July, compared to expectations for a 2.1% drop and a previous 1.0% drop. Core retail sales, which exclude fuel, fell 3.4% year-on-year, compared with market expectations for a 2.2% drop and a previous 0.9% drop.
On the other hand, the Eurozone’s trade surplus improved in June both on a seasonally adjusted (S.a.) and non-seasonally adjusted (N.s.a.) basis. Nevertheless, the former increased to 12.5 billion euros and the latter to 23 billion euros, compared with the previous values of 200 million euros and -300 million euros respectively. Earlier in the week, Eurozone industrial production unexpectedly rose in June, but a second reading of Eurozone second-quarter (Q2) gross domestic product (GDP) confirmed initial forecasts, while employment changes over the same period were modest. slow down.
It’s worth pointing out that EUR/GBP pared losses for the week amid cautious sentiment ahead of next week’s Jackson Hole annual meeting, where top central bankers will speak.
The final value of the euro zone’s inflation rate in July and the speech of the chief economist of the European Central Bank Rehn will be the focus of attention.
