Pound Sterling to Euro (GBP/EUR) Exchange Rate Below 1.33
The Pound Sterling to Euro (GBP/EUR) exchange rate continued trading below the 1.33 level on Tuesday despite the UK’s Construction PMI exceeded expectations.
As with yesterday’s Manufacturing PMI, the construction report showed stronger-than-forecast growth in January.
However, while the Pound fluctuated against peers like the Euro and US Dollar after the data was published, the British currency struggled to post a notable gain ahead of the Bank of England’s (BoE) interest rate decision.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trading in the region of 1.3243
The Pound was later pressured below the 1.32 level against the Euro as reports relating to Greece and the unlikelihood of the nation leaving the Eurozone emerged.
Various industry experts have asserted that, while the negotiations may run for several months, Greece will reach an accord with the European Central Bank (ECB) regarding its debt repayments.
Earlier…
GBP/EUR Exchange Rate Fails to Hold Gain
The Pound Sterling to Euro (GBP/EUR) exchange rate’s Manufacturing PMI-inspired respite proved short lived on Monday and the pairing returned to trending around 0.6% lower on the day’s opening levels.
Political uncertainty is likely to keep the Pound under pressure for the foreseeable future, as are bets that the Bank of England (BoE) will refrain from increasing interest rates until 2016.
That being said, tomorrow’s UK Construction PMI could give the Pound a small boost if it shows improvement.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading in the region of 1.3247.
Earlier…
GBP/EUR Exchange Rate Edges Higher
Although the common currency was deriving support from assertions that Greece must remain within the Eurozone, the Pound Sterling to Euro (GBP/EUR) exchange rate was able to trim its earlier losses following the publication of the UK’s Markit Manufacturing PMI.
Economists had forecast that the measure would rally from 52.5 in December to 52.7 in January.
However, it actually advanced to 53.0.
The result, whilst positive, hid underlying concerns regarding the UK’s future output.
Markit economist Rob Dobson stated; ‘UK factories reported a welcome upturn in growth of output and order books at the start of the year, but producers clearly remain stuck in a low gear. The rate of expansion remains muted, however, with output rising at a quarterly pace of around 0.2% in January, barely improving on the 0.1% registered in the final quarter of last year. At this rate, the sector will provide little meaningful boost to the economy in the first quarter.’
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading in the region of 1.3300.
Earlier…
The Pound Sterling to Euro (GBP/EUR) exchange rate slumped to 1.3264 on Monday ahead of the release of the UK’s latest manufacturing report.
GBP/EUR Exchange Rate Could Recover if Manufacturing Improves
The Pound edged lower against its European peer as a fresh week of trading began and investors focused on the upcoming Bank of England (BoE) policy meeting.
Given that all nine members of the Monetary Policy Committee voted in favour of leaving interest rates on hold at the last gathering, and UK reports have hardly been impressive since then, economists expect the central bank to take no action this time out.
In fact, it is currently projected that the BoE will refrain from increasing interest rates until 2016. This, in conjunction with UK political uncertainty in the run up to the general election, is weighing on the Pound.
The Pound Sterling to Euro (GBP/EUR) exchange rate achieved a high of 1.3347
However, the Euro pared some of its gains as European trading continued on Monday and Germany’s final Manufacturing PMI for January was negatively revised. The index was cut from 51.2 in December to 50.9 in January, down from a previous estimate of 51.0 and taking it closer to the 50 mark separating growth from contraction.
Markit economist Oliver Kolodseike said of the result; ‘January’s PMI results paint a somewhat mixed picture of the health of the German manufacturing economy. While production growth accelerated slightly on the month, it remained relatively low by historical standards and well below levels seen at the start of last year.’
The Pound Sterling to Euro (GBP/EUR) exchange rate brushed a low of 1.3256
The GBP/EUR exchange rate could recoup the rest of its losses in the hours ahead if the UK’s Manufacturing PMI shows the improvement expected.
The gauge is believed to have risen slightly from 52.5 to 52.7 in January.
An on or above forecast reading would be Pound supportive.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
As the week continues the Pound Sterling to Euro (GBP/EUR) exchange rate could fluctuate in response to a number of factors.
On Tuesday the main cause of GBP/EUR movement is likely to be the UK’s Construction PMI and the Eurozone’s Producer Price Index.
By the middle of the week the Eurozone’s final Services/Composite PMI’s and fresh retail sales data will be driving the pairing, as will the UK’s own Services/Composite PMI.
On Thursday, German Factory Orders and Construction/Retail PMI will be in focus, as will the Bank of England’s interest rate decision.
At the close of the week a final flurry of Pound Sterling to Euro (GBP/EUR) exchange rate movement could be caused by German Industrial Production numbers and the UK’s trade balance figures.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading in the region of 1.3283
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trading in the region of 0.7526
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5047
The US Dollar to Pound Sterling (USD/GBP) exchange rate is currently trading in the region of 0.6646
