GBPEUR Gains After Weaker German Retail Sales

GBP EUR Starts the Week with 1.1800 Test

The GBPEUR exchange rate was 0.23% higher on Wednesday after the latest German retail sales figures came in lower than expected at midday after the release of German employment data. On a monthly basis, price-adjusted retail sales declined in April due to virus lockdowns and restrictions.

GBPEUR is trading at 1.1612 after the euro saw three days of gains on German inflation and employment.

Retail Sales Weigh on Euro

Retail sales in Germany showed a reading of 4.4% for April 2021 compared to the same period last year, according to preliminary data from Destatis.

The number was lower than expectations for 10.1%, but on a month-on-month basis, price-adjusted retail sales were 5.5% lower in April because of the virus-led lockdown. Sales of food, beverages and tobacco declined 3.4% in April 2021 compared to the same period last year. Sales in supermarkets, retail stores, and convenience stores saw a year-on-year decline of 3.8%.

The growth was seen in products that could be delivered with the non-food items showing a yearly gain of 10.6% in real terms.

Items such as furnishings, household appliances and building supplies were up 7.2%, while internet and mail order businesses saw a 13.1% increase in sales.

Last week, a GfK consumer confidence survey saw German shoppers’ morale had improved less than expected as shoppers remained cautious despite the end of virus restrictions.

The German economy had boosted the euro with stronger inflation and employment data, but those gains have been halted by the sluggish retail sales figures.

Johnson Urged to Avoid Reopening Delay

Lord Karan Bilimoria spoke to LBC radio with Nick Ferrari and insisted Boris Johnson must not delay the June 21st reopening of the economy. Failing to do this would put further strain on tourism, hospitality and aviation, he said. He also insisted that the country is much better prepared to handle the latest virus variant compared to last summer.

Lord Bilimoria said: “The key figures are the hospitalisations and the deaths. Despite this Indian variant, and yes it is worrying that you have got 300,000 in certain areas but it is in under control, we can control this. We have got to open up the economy at some stage.”

He added: “The hospitality industry, the tourism industry, airline industry, the aviation industry are devastated and they are waiting to open up. We need clarity about what is going to happen on the 21st of June.”

Once again, the issue being pushed on Boris Johnson is a lack of clarity for businesses. As Lord Bilimoria suggested, businesses had advanced notice of a reopening, which allows them to plan. Now they are back in the dark and awaiting confirmation on a lifting of the last phase.

The situation last summer was one where there were no vaccines, and now the UK has said that 75% of the country has had a first vaccine, so with the Prime Minister stating that the vaccine protects against the variant, it is a great time to open up.

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