The Euro was unable to push higher against the Pound on Friday despite the release of data which increased hopes that the Eurozone’s economic recovery is starting to pick up momentum.
Following the release of weaker-than-forecast UK Construction data the Euro firmed but was unable to make significant gains. According to Markit’s Construction PMI, building activity in the UK fell to 60.8 in April, down from March’s figure of 62.5. Despite the dip construction activity in the UK remains close to its highest-level in ten years and had little negative impact upon the Pound.
A separate report also published by Markit showed that the recovery in the Eurozone’s manufacturing sector picked up speed at the start of the second quarter. As usual it was Germany that led the way but nations such as Spain and Italy also reported expansions. The PMI for the Eurozone increased to 56.5 in April, up from the 55.6 figure recorded in the previous month.
The French manufacturing sector meanwhile remained weak with its PMI tumbling to 51.2 from 52.1.
Any figure above 50 indicates expansion, whereas one below indicates contraction.
“The Eurozone PMI paints a promising picture for the regions manufacturers at the start of the second quarter. The recovery is becoming more broad-based and therefore hopefully more sustainable, as rising demand from each member state feeds growth in other countries,” said Markit’s chief economist Chris Williamson.
Euro traders will now turn their attention to next week ECB policy meeting. The Central Bank is not expected to introduce measures to tackle deflation but with inflation levels continuing to be well under the bank’s target of 2% investors will be watching the meeting closely.
Euro (EUR) Exchange Rates
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