The Euro has advanced steadily against the Pound today, thanks to positive Eurozone data and uninspiring news from the UK.
- EUR GBP rate rises to 0.85 – GBP EUR falls to 1.16
- Euro accelerates on Spanish unemployment drop – Best-ever result firms EUR demand
- UK construction PMI worse-than-expected – UK economic activity falls in March
- Greater Euro advance forecast on retail sales – Pound rally possible if UK services PMI rises
In the Euro’s case, support has come from a drop in Spain’s unemployed persons in March. The annual March drop pushed the rate of unemployment to its lowest since 2010 and was the best on record for the month.
Spain has historically struggled with extremely high unemployment since the 2012-13 period. This fact has further amplified the positive impact of the record-breaking drop in March as major progress for Spain.
UK news has once again focused on PMIs, with today’s construction PMI dropping from 52.5 to 52.2 instead of the forecast 52.4.
Offering a neutral assessment was IHS Markit Senior Economist Tim Moore;
‘March data showed a slight rebound in commercial construction activity. Survey respondents noted that the resilient economic backdrop and receding Brexit-related anxieties have helped to stabilise client demand after the disruption to development projects last summer’.
Near-term Euro movement could be triggered on Eurozone retail sales figures, due shortly and set to cover February.
On the month, a rise from -0.1% to 0.5% is forecast while an annual increase from 1.2% to 1.4% is expected.
Later on today, European Central Bank (ECB) President Mario Draghi is due to speak. Although the policymaker is usually highly influential, his comments at the launching of a new Eurozone banknote are not expected to focus excessively on monetary policy.
In the wake of Monday’s manufacturing PMI and today’s construction variant, the Pound is next set to be moved by Wednesday’s services PMI.
Expected to be the most impactful of the three PMI announcements, the services result is predicted to show a slight rise from 53.3 to 53.5.
As this will cover the month of the Article 50 trigger, data could show a slide in activity as fears about the Brexit process took over UK political and business discussions.
Current Interbank EUR GBP Exchange Rates
At the time of writing, the Euro to Pound (EUR GBP) exchange rate was trading at 0.85 and the Pound to Euro (GBP EUR) exchange rate was trading at 1.16.