Euro Gains Against Pound as UK Retail Sales Disappoint

The EUR/GBP pair gains momentum, approaching 0.8330 during the early European session on Friday, as the British Pound (GBP) weakens following the release of disappointing UK Retail Sales data for October. Later in the day, traders will look for direction from the preliminary Eurozone HCOB Purchasing Managers Index (PMI) and a speech by European Central Bank (ECB) President Christine Lagarde.

According to the Office for National Statistics (ONS), UK Retail Sales fell 0.7% month-on-month in October, below expectations for a 0.3% decline and a revision from September’s 0.1% increase. Excluding auto fuel, Retail Sales dropped 0.9%, also missing the anticipated 0.4% decrease and a revision from the previous 0.1% rise.

The weak retail data triggered selling pressure on the GBP, providing support for the EUR/GBP pair. Attention is now turning to the preliminary UK S&P Global/CIPS PMI data, due later today.

Meanwhile, speculation surrounding the European Central Bank's (ECB) potential interest rate cuts weighs on the Euro. ECB policymaker Yannis Stournaras suggested a 0.25% rate cut in December, with additional reductions likely in 2025. Bank of Italy Governor Fabio Panetta echoed this sentiment, urging the ECB to accelerate rate cuts to support the Eurozone economy, while calling for a shift away from the current “meeting-by-meeting” approach to monetary policy.

Paraphrasing text from "Reuters" all rights reserved by the original author.