British Pound to Euro (GBP/EUR) Exchange Rate Hits Three-Week High
The British Pound breached the key 1.20 level against the Euro yesterday and continued to push higher today after the release of positive UK retail sales data buoyed optimism that the nation’s economy is continuing to improve.
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Data released by the Office for National Statistics showed that retail sales rose more than economists had been expecting in February and reversed the downward negative trend see n in January.
Thanks to a surge in food sales overall retail sales increased by 1.7% in February, recovering from the 2% drop seen at the start of the year and smashing forecasts for a rise of just 0.5%. On a yearly basis sales surged by 3.7%, smashing expectations for a figure of 2.5%.
Sterling advanced as the data added to yesterday’s comments by Bank of England policy member Martin Weale who said that expects interest rates to rise as the economy continues to improve.
“Consumers are still loosening their purse strings. The figures provided some reassurance that the economic recovery has not lost pace in the first quarter of the year,” said an economist from the London based Capital Economics.
The Euro meanwhile has been weakened by comments by European Central Bank policy-makers. Governing Council member Jens Weidmann said that quantitative easing and other measures could be on the cards. Some economists dismissed his words as just an attempt to soften the Euro in an effort to aid the region’s exports others took it as a sign that the ECB was planning to announce measures.