The pound is weak against the euro this morning after disappointing retail sales figures showed a worse-than-expected drop in December, plummeting by -1.3 per cent. A poor result in consumer spending during the Christmas period has dampened investors’ confidence in the pound. With continuing Brexit uncertainty plaguing both political parties, Sterling is not expected to gain on the euro ahead of the weekend. Boris Johnson will deliver a major speech today in which he is set to use Brexit as a way of uniting divisions, with some seeing it as a leadership challenge to Theresa May.
The euro held onto its gains against the pound today despite poor seasonally-adjusted Eurozone current account figures for November, which showed a decrease to €20.3billion against October’s €27.0bn.
These will be followed later on by Portugal’s PPI figures for December, which are expected to decrease, potentially clipping some of the euro’s gains on the pound.
The euro has further gained on the pound after the French Prime Minister, Edouard Philippe, triggered a no-deal Brexit contingency plan, which could cost up to €57million.
This stoked some euro investors’ fears of a chaotic Brexit.
Mr Phillipe said: “What’s certain is that the scenario of a no-deal Brexit is less and less unlikely…
“That’s why… I have decided to trigger the plan for a no-deal Brexit.’
Looking ahead to next week, EUR investors will be awaiting the publication of Germany’s PPI figures for December, with any signs of an increase providing some potential uplift for the single currency.
Sterling investors, meanwhile, will be awaiting Mrs May’s Brexit ‘Plan B’ which she will present before Parliament on Monday.
This could potentially benefit the pound euro exchange rate into next week if it pleases Sterling investors.