ExchangeRates.org.uk - At the time of writing, GBP/EUR traded at around €1.2114, down roughly 0.2% from Thursday’s opening rate.The Pound (GBP) weakened against the majority of its peers on Thursday following the publication of the Bank of England’s latest interest rate decision.
The central bank enacted a widely expected interest rate hold, maintaining rates at 4.75%.
However, a larger-than-expected number of Monetary Policy Committee members voted for a rate cut instead, with three of the nine MPC members voting to reduce rates to 4.5%.
This dovish divergence saw the Pound slump against almost all of its counterparts following the release despite the anticipated decision.
The Euro (EUR) managed to hold steady against the majority of its peers on Thursday following the publication of Germany’s latest GfK consumer confidence index.
January’s sentiment barometer printed above market expectations, rising from -23.1 to -21.3 rather than a more modest -22.5 expectation.
This forecast beating data lent the common currency some marginal support on Thursday, however, as the index remained deeply in negative territory, the Euro’s gains were largely capped.
Looking ahead, the primary driver of movement for the Pound Euro exchange rate looking at Friday will likely be the publication of the UK’s latest retail sales index.
November’s retail sales figure is forecast to jump from a previous reading of -0.7% to 0.5 which could see GBP exchange rates close the week on the front foot.
Turning to the Euro, Germany’s latest PPI data may also bolster EUR exchange rates on Friday as November’s reading is forecast to rise from -1.1% to -0.3%.
This content was originally published on ExchangeRates.org.uk