European session review: EUR mostly higher after ECB monetary policy meeting accounts

EUR traded mostly higher against its major rivals in the European session on Thursday after the release of the minutes from the ECB monetary policy meeting on January 22-23. The document revealed the policymakers saw positive signals. "The risks surrounding the euro area growth outlook, related to geopolitical factors, rising protectionism and vulnerabilities in emerging markets, remained tilted to the downside, but had become less pronounced as some of the uncertainty surrounding international trade had receded," the minutes noted.

GBP traded mixed against other major currencies, following the release of upbeat UK's retail sales data for January and the Confederation of British Industry's (CBI) survey of industrial trends.

The Office for National Statistics (ONS) reported the British retail sales rose by 0.9 percent m/m in January, following a revised 0.5 percent m/m drop in the previous month. That was the largest advance in retail trade since March 2019. Economists had expected a 0.7% increase. The January gain in retail sales was mainly attributable to a “moderate growth” in both food (1.7 percent m/m) and non-food stores (+1.3 percent m/m), despite rising fuel prices dampening volume, the ONS said. In y/y terms, the UK's retail sales rose 0.8 percent, easing from a 0.9 percent rise in the previous month, but exceeding economists' expectations of a 0.7 percent gain.

The latest CBI's survey provided early signs of a turnaround in manufacturing activity, as manufacturing order book balance improved to -18 in February (from -22 in January), its highest level since August 2019, and output expectations for the next three months rose to +8 (from +4 in January), its highest level since February 2019. However, the sector witnessed output volumes falling for a fifth rolling quarter in a row, albeit at a slower pace than in January.