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8 Jan 2014
EUR/GBP declines on German trade balance, finds support on EZ sales
FXstreet.com (London) - EUR/GBP fell from mid-morning highs after German trade balance figures before receiving some support from improved retail sales figures and on-consensus employment data. The pair is currently trading at GBPGBP0.8287.
German trade surplus widens
The near-record surplus from Germany has created worries that the Eurozone cannot rely on German spending to help drag up other countries within the economic union.
Figures from the German Federal Statistical Office showed a surplus in November of EUR17.8bn - up from a downward-revised EUR16.7bn in October. The breakdown showed that seasonally-adjusted exports rose 0.3 percent month-on-month to EUR93.2bn, while imports declined 1.1 percent to EUR75.4bn.
European employment printed flat month-on-month at 12.1 percent. And in the low-growth Eurozone, “not worse than expected” is the new “good.”
European retail figures printed above expectations, with a strong November, up 1.4 percent against consensus expectations of a 0.2 percent month-on-month rise.
Bank of England rates to be held
On the GBP leg, the main focus is on tomorrow morning’s Bank of England rate decision. But with a decision to hold rates at 0.5 percent almost set in stone, most of today’s EUR/GBP will come from the European side.
It is likely that the record-low 0.5 percent BoE base rate will be maintained through 2014.
Mark Carney has been consistent in setting out a 7 percent unemployment threshold, below which the BoE will consider raising interest rates. UK unemployment currently stands at 7.4 percent and is forecast to dip below 7 percent before the end of the year, however Carney has stated that the 7 percent level is a threshold and not a trigger and the BoE may wait until unemployment has fallen further before it moves to hike rates from their current record-low levels.
EUR/GBP sheds mid-morning gains
EUR/GBP fell from mid-morning highs at GBP 0.8317 to find resistance near the session opening price at the GBP0.8300 level. The pair found some support on European retail figures, retracing to GBP0.8287 but still down 0.18 percent on the day.
German trade surplus widens
The near-record surplus from Germany has created worries that the Eurozone cannot rely on German spending to help drag up other countries within the economic union.
Figures from the German Federal Statistical Office showed a surplus in November of EUR17.8bn - up from a downward-revised EUR16.7bn in October. The breakdown showed that seasonally-adjusted exports rose 0.3 percent month-on-month to EUR93.2bn, while imports declined 1.1 percent to EUR75.4bn.
European employment printed flat month-on-month at 12.1 percent. And in the low-growth Eurozone, “not worse than expected” is the new “good.”
European retail figures printed above expectations, with a strong November, up 1.4 percent against consensus expectations of a 0.2 percent month-on-month rise.
Bank of England rates to be held
On the GBP leg, the main focus is on tomorrow morning’s Bank of England rate decision. But with a decision to hold rates at 0.5 percent almost set in stone, most of today’s EUR/GBP will come from the European side.
It is likely that the record-low 0.5 percent BoE base rate will be maintained through 2014.
Mark Carney has been consistent in setting out a 7 percent unemployment threshold, below which the BoE will consider raising interest rates. UK unemployment currently stands at 7.4 percent and is forecast to dip below 7 percent before the end of the year, however Carney has stated that the 7 percent level is a threshold and not a trigger and the BoE may wait until unemployment has fallen further before it moves to hike rates from their current record-low levels.
EUR/GBP sheds mid-morning gains
EUR/GBP fell from mid-morning highs at GBP 0.8317 to find resistance near the session opening price at the GBP0.8300 level. The pair found some support on European retail figures, retracing to GBP0.8287 but still down 0.18 percent on the day.