Sterling Inches Upward Despite Disappointing UK Retail Sales Data

The pound managed to make slight gains despite lackluster retail sales figures from the UK. Meanwhile, in Europe, the euro experienced a modest increase against the dollar following reports of better-than-expected German producer prices and an upward revision of growth forecasts for the German economy.

The EUR/USD pair rose by 0.1% to 1.0648 as German producer prices in March declined by 2.9% year-on-year, outperforming the forecasted 3.2% decrease. Moreover, news of the German government’s upward revision of its growth projection for the economy further contributed to the euro’s strength.

However, this uptick in the euro may be fleeting, as expectations mount for the European Central Bank to implement interest rate cuts before the Federal Reserve does, aiming to stimulate struggling economies across the region.

Meanwhile, the GBP/USD pair saw a modest increase of 0.1% to 1.2445, trading slightly above five-month lows, despite disappointing retail sales data from the UK. Retail sales in March remained stagnant, failing to meet expectations of a 0.3% increase, marking the first month since December without any growth in sales volumes.

The stagnation in retail spending raises the likelihood of the Bank of England initiating interest rate cuts in the coming months, potentially ahead of the Federal Reserve’s actions.

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