The exchange rate has climbed to €1.136, up from €.127 yesterday.
Sterling was boosted yesterday by retail sales data released out of the UK.
According to data published by the Office for National Statistics (ONS), retail sales growth in the UK surged from 0.6 per cent to one per cent in August, reaching its highest levels since April and beating expectations it would slide to 0.2 per cent.
A strong uptick in clothing sales in particular appeared to drive the rise in sales last month, with increased demand for non-essential items helping to offset subdued food and fuel sales.
The ONS said in its report: “Year-on-year contribution of food stores remains flat, while there was a fall in the contribution of growth within petrol stations, showing that contributions to the overall growth came from non-essential items.”
It wasn’t the only factor to boost the exchange rate. The euro was weakened ahead of an announcement from the Federal Reserve.
TorFX currency analyst Rewan Tremethick said: “Data showing strong growth for UK retail sales in August proved a nice surprise for markets yesterday.
“Sales grew one per cent on the month, against predictions of a 0.2 per cent expansion.
“This pushed GBP/EUR up 0.3 per cent to €1.130, with the euro also weakened by market anticipation of the Federal Reserve announcements in the evening.”
Fresh data out of the UK today could stand to further influence the exchange rate.
An update from the Eurozone is also on the agenda.
Mr Tremethick said: “UK government borrowing figures and a speech from European Central Bank (ECB) President Mario Draghi this afternoon will ensure that GBP/EUR doesn’t get much of a rest ahead of Theresa May’s Brexit speech on Friday.”
