Euro remains depressed near 0.8650 against the British Pound despite upbeat German data

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The Euro (EUR) languishes at 11-day lows against the British Pound (GBP) on Friday, on track for a 0.85% weekly loss. The positive German Gross Domestic Product (GDP) data has failed to support the common currency, while the Pound has been unfazed by weak Retail Sales numbers.

EUR/GBP flatlines around 0.8650 despite positive German data.
The German economy grew at a steady 0.3% pace in Q1, according to GDP figures.
UK Retail Sales contracted way beyond expectations in April

German GDP confirmed that the Eurozone’s leading economy grew at a 0.3% pace in the first three months of the year, unchanged from the previous quarter, while the yearly GDP was revised up to 0.4% from previous estimations of a 0.3% growth.

At the same time, NIQ revealed that the German GfK Consumer Confidence Survey for June picked up to -29.8, from an upwardly revised -33.1 in May. These are still negative levels, but closer to the figures seen before Iran’s war and, anyway, better than the -34 market consensus. The impact on the Euro, however, has been muted so far.

In the UK, data from National Statistics has shown that Retail Sales contracted at a 1.3% pace in April, more than twice the 0.6% decline expected by the market, following a 0.6% increase in March. Excluding fuel, sales of all other products dropped a more moderate 0.4%, but also beyond the 0.3% drop expected, following a 0.1% increase in March.

The Sterling, nevertheless, has managed to take back all the ground lost during the previous one, as market concerns about the country’s political stability seem to have ebbed. Apart from that, business activity showed further resilience in the UK than in the Eurozone on Thursday, which provided an additional boost to the GBP

Economic Indicator

Gross Domestic Product (QoQ)

The Gross Domestic Product released by the Statistisches Bundesamt Deutschland is a measure of the total value of all goods and services produced by Germany. The GDP is considered as a broad measure of the German economic activity and health. A high reading or a better than expected number has a positive effect on the EUR, while a falling trend is seen as negative (or bearish).

Economic Indicator

Retail Sales (MoM)

The Retail Sales data, released by the Office for National Statistics on a monthly basis, measures the volume of sales of goods by retailers in Great Britain directly to end customers. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales volumes in the reference month with the previous month. Generally, a high reading is seen as bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.