European session review: GBP mixed after UK’s retail sales data and EU chief Brexit negotiator’s comments

GBP traded mixed against other major currencies in the European session on Friday as market participants assessed the latest UK's retail sales data and the EU chief Brexit negotiator Barnier's comments on post-Brexit trade negotiations. The pound was little changed against USD, JPY and NZD, but fell slightly against EUR, CAD, CHF and AUD.

The Office for National Statistics (ONS) reported the UK's retail sales plunged 5.1 percent m/m in March, following a 0.3 percent drop m/m in February. That was the biggest monthly decrease on record as many stores ceased trading from late March following official government guidance for lockdown during the coronavirus pandemic. Economists had forecast a 4.0 percent drop. Food stores (+10.4 percent m/m) and non-store retailing (+5.1 percent m/m) were the only sectors to show growth in March, while clothing store sales posted a steep decline in sales (-34.8 percent m/m). In y/y terms, the UK's retail sales fell 5.8 percent, also the biggest decline ever.

Investors also digested the latest comments of the EU chief Brexit negotiator Michel Barnier, who said that a decision needs to be taken by the end of June on whether or not to extend the Brexit transition period. He noted that Britain has consistently rejected the idea of the transition extension, but "the clock is ticking". Barnier also added that the UK failed to engage substantially on some topics and the EU cannot accept selective progress on a limited selection of Brexit issues. The sides need to find solutions on most difficult topics, he said.

It should be also noted that the UK's Prime Minister Boris Johnson is to resume his full duties on Monday.