The Pound Sterling to Euro (GBP/EUR) exchange rate briefly touched a new 7-year high on Wednesday following the release of mixed data from the Eurozone.
The Pound Sterling to Euro (GBP/EUR) exchange rate touched a session high of 1.3816
Sterling gave up some of its earlier support following the release of a softer than forecast Services Purchasing Managers Index (PMI). The Markit compiled index inched lower in February to a reading of 56.7. The number was below expectations for 57.5 and was down from the 57.2 recorded in January.
Despite the PMI coming in below expectations the Pound remained supported against the Euro as it showed that firms hired staff at the second fastest pace on record and new orders increased. Markit believes that the UK economy will expand by 0.6% in the first quarter of 2015 following the release of upbeat construction and manufacturing PMI reports.
‘Despite a small dip, the UK services PMI points to strong growth. The services PMI fell to 56.7 in February from 57.2, below consensus expectations for a rise. Some correction had been on the cards given the large jump in the index last month, so it is hardly anything to start worrying about or pinning ‘UK slowing’ statements on,’ said Rob Wood, chief economist at Berenberg Bank.
Data released in the Eurozone came in mixed with Eurozone retail sales smashing forecasts whilst on the other hand PMI’s disappointed.
The region’s Services PMI fell from an initial estimate of 53.9 to 53.7 in February. The figure was higher than the preceding month’s final reading of 52.7 indicating that activity in the service sector expanded at a slower pace than initially estimated.
The composite PMI for the region, which measures both services and manufacturing activity across the 19-member currency bloc, rose to a seven month high of 53.3, a rise from the 52.6 seen in the first month of 2015.
Retail sales across the Eurozone climbed by 1.1% a figure that smashed the 0.1% rise forecast by economists. On an annual basis sales surged by 3.7%, beating expectations for an annual increase of 1.9%.
Despite the mostly positive data releases, the Euro remains under heavy selling pressure ahead of Thursday’s European Central Bank interest rate decision and press conference. The bank is expected to announce more details on its €1.1 trillion quantitative easing programme, which is due to launch this month.
Euro Exchange Rates:
Euro,
,US Dollar,1.1128 ,
Euro,,British Pound,0.7251 ,
Euro,,Australian Dollar,1.4198 ,
Euro,,Canadian Dollar,1.3918 ,
