Yesterday ECB (European Central Bank) held its council meeting minutes. Some of its members mentioned that their rate cut cycle came to an end in October, unless the presence of new risks emerging, their stance on interest rates levels would be maintained. One concern for the Eurozone is whether this view will sustain economic growth for the European Union or if fine tuning of further rate decisions could be needed to strengthen economic productivity. The comments did confirm though that EUR is holding strong against other currency pairs like GBP and USD whose central bank’s monetary view is very different and require further rate cuts.
This morning, we had German import prices and retail sales released. Import prices rose by 0.2% above its forecasting of being unchanged at 0% in November. Germany relies heavily on imported goods from China and US. With recent USD strength in October leading into November, cost of imported goods has increased cause of this leading naturally to higher import prices.
Retail sales in Germany fell surprisingly in October, with forecasts of a 0.2% growth actual numbers landed at a decrease of -0.3%. We have seen similar figures for the UK, where consumer confidence is lower and consumers holding off spending ahead of the Christmas period and find better deals across Black Friday sales. Concerns would grow if retail sales looking poorly in November, suggesting that household have less disposable income and spending power has decreased cause of uncertain economic situations.
GBP/EUR 1.1405 GBP/USD 1.3197 GBP/AED 4.8495
GBP/AUD 2.0234 GBP/CHF 1.0633 GBP/CAD 1.8533
GBP/NZD 2.3128 EUR/USD 1.1556 GBP/ZAR 22.6319