Pound Jumps Against Euro and Dollar on UK Retail Sales Sterling Boost

February 21, 2025 - Written by Frank Davies

STORY LINK Pound Jumps Against Euro and Dollar on UK Retail Sales Sterling Boost

The Pound posted gains against the Euro and US Dollar after the latest UK data releases with strong retail sales and tax receipts data for January easing unease over the economy.

The Pound to Dollar exchange rate (GBP/USD) hit fresh 2-month highs just below 1.2680 while the Pound to Euro exchange rate (GBP/EUR) held firm around 1.2075.

UK retail sales volumes jumped 1.7% for January after a revised 0.6% decline for December and compared with consensus forecasts of a 0.4% increase. This was the highest figure since August 2024.

Food-store sales surged 5.6% on the month after December weakness while non-food store sales declined.

Sales volumes fell by 0.6% in the three months to January 2025 from the previous three months, but increased 1.4% over the year.

The GfK consumer confidence index also improved slightly to -20 for February from -22 previously and slightly above market expectations.

Provisional data also indicated that the UK government had a surplus of £15.4bn for January from £14.6bn the previous year and the strongest January surplus since the current series began in 1993.

January is always a strong month for receipts due to personal self-assessment tax receipts, but the better than expected data will ease fears over underlying trends and curb expectations that Chancellor Reeves will have to raise taxes further in March.

Pound Sterling Performance

The Pound advanced modestly against most major currencies in the latest session, reflecting a generally upbeat performance. Gains ranged from a mild 0.05% against the US Dollar (GBP/USD) at 1.26763, to more robust improvements such as the 0.79% jump on the Japanese Yen (GBP/JPY) to 190.87529.

Other notable gains include a 0.48% climb against the Israeli Sheqel (GBP/ILS), which brought the cross to 4.51454, and a 0.23% gain on the Australian Dollar (GBP/AUD) to 1.98346. The Pound also strengthened by 0.22% against the Singapore Dollar (GBP/SGD), settling at 1.69307, while upward moves against the Swiss Franc (GBP/CHF), Canadian Dollar (GBP/CAD), and Norwegian Krone (GBP/NOK) came in between 0.11% and 0.15%. Meanwhile, smaller percentage changes were seen against the Euro (GBP/EUR) and Swedish Krona (GBP/SEK), with each posting slight increases of under 0.10%.

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TAGS: Pound Dollar Forecasts Pound Euro Forecasts