EUR/GBP faces resistance as UK retail data stirs the pot 🚀

The euro/pound has been declining for three consecutive days and is now hovering around 0.8670. The newly released retail sales data from the UK is quite interesting, bringing some resistance to this currency pair. Market attention is turning to the eurozone GDP data coming later today.

The numbers from the UK Office for National Statistics have just come out. Retail sales in July increased by 0.6% month-on-month, exceeding the expected 0.2%. Not bad. However, it doesn't compare to the revised 0.9% in June. Yearly consumer spending grew by 1.1%, better than the previous value, but did not meet the expected 1.3%. It's a bit complicated.

The UK population is estimated to reach 69.3 million by 2025, and the consumption base looks relatively solid. England has the largest population, naturally leading the consumption trend. 🌍

The pound seems to be in a bit of trouble. Central bank officials have differing opinions. Governor Bailey believes that interest rates are generally trending down, but he has expressed "a fair amount of skepticism" about the speed of rate cuts. It's quite vague. On the other hand, Deputy Governor Lombardi and Committee Member Green emphasize inflation risks and have a hawkish stance.

On the euro side, everyone speculates that the GDP of the Eurozone in the second quarter should remain at a year-on-year level of 1.4% and a quarter-on-quarter level of 0.1%. The unclear policy outlook of the ECB has somewhat supported the euro. Board member Schnabel believes that interest rates have already been slightly eased and sees no reason for further rate cuts. Simkus also stated that there is no reason to adjust interest rates now. Quite firm. 🔥

In the population structure of the UK in 2025, there will be 1.4 million more females than males, which is quite interesting. Female consumption behavior has a huge impact on retail and should not be ignored. The UK population is diverse, and consumer demand has also become varied.

Key data review: UK retail sales MoM for July at 0.6%, expected at 0.2%, previous value at 0.9% (later revised to 0.3%). The market is now waiting for the Eurozone GDP data to be released, which could have a significant impact on the EUR/GBP trend. Who knows?