Euro remains depressed against British Pound despite positive Eurozone data

• EUR/GBP drifts back from 0.8575 highs and approaches one-year lows at 0.8546.
• A string of fairly positive Eurozone releases has failed to support the Euro.
• The British Pound has been unaffected by the weak UK construction activity figures.

The Euro (EUR) remains depressed near one-year lows against the British Pound (GBP) on Monday, hitting session lows below 0.8560 after pulling back from Friday’s highs at 0.8575. A string of rather positive Eurozone figures has failed to provide any significant support, while the Pound remains moderately bid despite weak UK construction figures.

Eurozone Retail Sales have picked up 0.2% in May, slightly below the 0.3% market consensus but above the 0.3% contraction seen in April. Year-over-year (Y-o-Y), consumption accelerated to 1.6%, as expected, up from April’s 1% reading.

Before that,  German Factory Orders figures beat expectations with a 1.9% increase in May, well above the 1.2% increase expected, partially reversing the 3.2% contraction seen in April. The Sentix Investors’ Confidence Index for July improved to -3.1, from -13.4 in June, reaching its best reading in the last four months.

In the UK, May’s S&P Global Construction Purchasing Managers Index (PMI) figures revealed a weaker-than-expected improvement in the sector’s business activity. The Index improved to 38.4 from 38.2 in the previous month, yet remained well below the 40.0 reading anticipated by market consensus.

The Pound remains fairly steady amid the UK’s political uncertainty as the market braces for the seventh prime minister in the last 10 years. Andy Burnham, the Mayor of Manchester and the best-positioned to replace the previous PM, Keith Starmer, has vowed to respect the fiscal rules, which is keeping Pound’s bears in check for now.