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Forex: EUR/GBP tumbles on good UK retail sales and PSNB

FXstreet.com (Barcelona) - The EUR/GBP traded sideways around the opening price of 0.8566 during the Asian session, but EUR weakness in reaction to disappointing Markit PMI data in France and Germany and the GBP strength ahead of UK retail sales and PSNB data sent the cross down to 0.8513 low. However, data release sent the EUR/GBP further down, to 0.8500 psychological level already.

UK retail sales surprised on the upside: +2.1% (vs +0.5% consensus) (MoM), with ex-fuel data up by +1.9% (vs consensus of +0.5%). Annualized data rose from -0.5% to +2.6%, with the ex-fuel figure up from +0.5% to +3.3%. UK PSNB rose from £-10.263B to £4.356B in February, but was much less than the expected £8.250B.

Disappointing France Markit PMI figures had manufacturing PMI at 43.9 vs 44.3 consensus and services PMI at 41.9 vs 44.0 consensus. German data saw manufacturing dropping from 50.3 to 48.9 (consensus of 50.5) and services fell from 54.7 to 51.6 (consensus of 55.0). The EMU Composite PMI down from 47.9 to 46.5 (consensus of 48.2).

“The EUR/GBP is likely to retest the 55 day moving average at 0.8533 and this week’s low at 0.8506 around which it could hold again, though. If not, the 0.8448 February low will be back in sight”, wrote Commerzbank analyst Karen Jones.

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