EUR\/GBP fell on Friday as UK Retail Sales and preliminary PMI figures supported Sterling, while Eurozone flash PMI data did not lift the Euro. The pair traded near 0.8733, down about 0.13% on the day, yet was still set for a third weekly rise.<\/p>\n
UK Retail Sales rose 1.8% month-on-month in January, above the 0.2% forecast and up from December\u2019s 0.4%. Annual Retail Sales increased 4.5% versus a downwardly revised 1.9% and beat the 2.8% forecast.<\/p>\n
S&P Global\u2019s early PMI readings showed the Composite PMI at 53.9, a 22-month high. Manufacturing rose to 52, an 18-month high, and Services held at 53.9, with all three above forecasts.<\/p>\n
The survey data pointed to GDP growth of just over 0.3% in Q1 if momentum continued into March. It also reported faster manufacturing export orders, at the quickest pace since the pandemic.<\/p>\n
In the Eurozone, the HCOB Composite PMI rose to 51.9 in February from 51.3, above the 51.5 forecast and a three-month high. Manufacturing climbed to 50.8 from 49.5, above 50.0 and a 44-month high, while Services inched up to 51.8 from 51.6, below 52.0.<\/p>\n
Germany recorded the fastest expansion in four months, while France was little changed. Elsewhere, growth continued but was the slowest since June 2025.<\/p>\n
Looking back at this time last year, we saw the beginnings of a key shift as strong UK economic data started to outperform the Eurozone. This set a tone for the British Pound that continued through much of 2025. The divergence in economic momentum laid the groundwork for the trading environment we see today.<\/p>\n
The trend of UK economic resilience proved persistent, especially regarding inflation. For instance, UK core inflation only recently dipped below 3.0% in the figures released for January 2026, keeping the Bank of England more cautious on rate cuts compared to the European Central Bank. Historically, when the BoE is more hawkish than the ECB, as we saw in the 2017-2018 period, EUR\/GBP tends to drift lower.<\/p>\n
This divergence is creating opportunities in the options market for the coming weeks. We believe buying put options on EUR\/GBP, targeting a move towards the 0.8550 level, is a reasonable strategy. Recent data confirms the split seen last year, with the latest German ZEW Economic Sentiment survey for February showing a robust 15.2, while the broader Eurozone figure came in at a less impressive 11.8, highlighting persistent internal weakness.<\/p>\n
Therefore, traders should consider positioning for further Sterling strength against the Euro. The consistent outperformance of UK service sector PMIs, which have averaged above 53.5 for the last six months of 2025, contrasts with a more sluggish Eurozone services average of 51.5 over the same period. This fundamental gap supports short EUR\/GBP positions or the purchase of derivatives that profit from a decline in the pair.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/GBP slips as strong UK retail sales and PMIs boost Sterling, while Eurozone PMI offers limited support.<\/p>\n","protected":false},"author":62,"featured_media":17031,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42429","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42429","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=42429"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42429\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17031"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42429"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42429"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42429"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}