The pair is currently trading at around 1.2381.
Pound (GBP) Slips on Back of Data Releases
The Pound lost its footing this morning as disappointing data releases scuppered Sterling movement.
Although retail sales managed to edge to 0.3% in December from a -4.1% contraction in November, the figures missed the 1.2% forecast entirely.
The figures worried investors as the growth, albeit small, showed that despite being out of lockdown shoppers couldn’t be drawn to spend money, sparking concern for the economy.
Furthermore, the UK Services PMI fell sharply to 38.8 points in January, down from 49.4 in December.
Chris Williamson, Chief Business Economist at IHS Markit, said:
January 22, 2021 - Written by Frank Davies
Despite some broadly disappointing UK ecostats published at the end of the week, the British Pound to US Dollar (GBP/USD) exchange rate is still on track to end the week notably higher. Market sentiment has solidly improved after this week’s political events, so investors have even less reason to hold onto the safe haven US Dollar. As for the Pound though, its potential for further gains is limited as the domestic coronavirus situation remains highly concerning.
Since opening this week at the level of 1.3583, GBP/USD has largely been trending higher as the Pound capitalises on US Dollar weakness.
Soaring Inflation & Supply-Chain Disruptions Spark Surge In US PMIs zerohedge.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from zerohedge.com Daily Mail and Mail on Sunday newspapers.
GBP/EUR Exchange Rate Undermined by USD Slump
The Pound to Euro (GBP/EUR) exchange rate has suffered modest losses this morning, as broad weakness in the US Dollar (USD) helps to boost the single currency.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1056, slightly down from today’s opening levels.
Euro (EUR) Buoyed by USD Weakness in Spite of Lacklustre PMI Figures
The Euro (EUR) is trending higher against the Pound (GBP) this morning, as the single currency’s negative correlation with the US Dollar (USD) sees the broad weakness in the ‘Greenback’ bolster the appeal of the Euro.