The euro strengthened against the pound but was slightly weaker against the dollar yesterday, after the ECB’s Chief Economist expressed concern over the rising euro. He’ll make another speech later today.
After PMI figures came in slightly better than expected yesterday, but showed a decline month-on-month, retail sales figures were released. The Eurozone’s retail trade fell by 1.3% from a month earlier in July, following a 5.3% increase in June. Whilst restrictions are easing, a rise in infections across Europe could be putting pressure on demand.
Construction PMI for the Eurozone and Germany came in this morning. For Germany, the figure rose to 48 in August from 47.1 in July, pointing to the sixth consecutive month of contraction for the sector. For the whole of the Eurozone, the reading edged down to 47.8 in August from 48.9 in July, which was the sharpest contraction in the sector in three months. The sector, therefore, continues to suffer, with growth in housing construction in Germany and Italy insufficient to make up for the solid decline in home building in France.
