The pound traded sideways at the end of last week’s session as some upbeat retail sales figures failed to drive any lasting gains in the UK currency.
Sterling appears to be faring better so far this week however, with GBP/EUR buoyed at €1.1545, GBP/USD steady at $1.2992 and GBP/CAD edging up to C$1.7369, while GBP/AUD and GBP/NZD both surge, striking AU$1.8266 and NZ$1.9503 respectively.
As Parliament reconvenes after the Easter recess we may see Brexit begin to influence the pound again this week, especially as UK economic data dries up again.
What’s been happening?
Trade in the pound was mixed in the latter half of last week as some upbeat domestic retail sales figures failed to spark broad demand in the UK currency.
Data published by the ONS revealed that sales growth jumped from 0.6% to 1.1% in March, flying past expectations it would instead contract to -0.3%.
However this only led to some sporadic gains for Sterling in the wake of some mixed UK economic data earlier in the week.
The pound fared best against the euro at the tail end of the week, with the GBP/EUR exchange rate rallying after the latest Eurozone PMI figures revealed growth in the bloc’s private sector continued to weaken in April, confirming fears that the Eurozone’s recent slowdown would extend into the second quarter.
Meanwhile, the GBP/USD exchange rate drifted lower as the US dollar was buoyed by both weakened demand for the euro as well as the release of America’s own retail sales figures which rebounded from -0.3% to 1.6% in March.
What’s coming up?
Looking to the week ahead, we may see Brexit begin to drive momentum in the pound again as UK MPs return from their Easter recess.
GBP investors will be hopeful that this will help to refocus cross-party talks between the Conservatives and Labour, with hopes that the Tories will be willing to give some ground in order to get a deal through the door and avoid a potentially disastrous performance in European elections.
Meanwhile, EUR investors will be focused on the latest Eurozone consumer confidence figures in the first half of this week’s session, with the euro potentially struggling if consumer sentiment remained broadly negative in April.
Finally, the US dollar could face some pressure later this afternoon if US new homes sales are revealed to have fallen in line with expectations last month.
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