- EUR/GBP depreciates as BRC Like-For-Like Retail Sales climbed 2.9% YoY in August, beating the expected 2% growth.
- The BRC said August’s consumer spending was encouraging but stressed that retailers remain cautious.
- The Euro receives support as the ECB is widely expected to keep rates unchanged in September.
EUR/GBP edges lower after two days of gains, trading around 0.8670 during the Asian hours on Tuesday. The currency cross depreciates as the Pound sterling (GBP) receives support after the release of British Retail Consortium (BRC) Like-For-Like Retail Sales, which rose 2.9% year-on-year in August. The reading beat July’s 1.8% gain and market forecasts of 2%, marking the strongest growth in four months.
The BRC said in its statement that August’s figures were encouraging but highlighted that retailers remain cautious amid weak consumer confidence ahead of the Christmas trading season. The sector continues to grapple with high borrowing costs, elevated energy bills, and uncertainty surrounding the government’s November budget.
The EUR/GBP cross may regain its ground as the Euro (EUR) continues to draw support against its peers ahead of the European Central Bank (ECB) interest rate decision due on Thursday. Traders expect the ECB to keep rates unchanged for the second consecutive meeting in September, supported by steady growth and inflation hovering near the target. Market participants will scrutinize the meeting for any guidance on the bank’s outlook for the rest of the year.
France, the third-largest economy in Europe, is struggling with a fresh political crisis after Prime Minister François Bayrou lost a confidence vote in the National Assembly. Bayrou had unexpectedly called the vote amid strong opposition to his budget plans. President Emmanuel Macron is expected to appoint a new prime minister within days, per the BBC.
