The Pound to Euro Exchange Rate has stuttered slightly today as PMI Services statistics show a slowdown in growth for February. January’s strong figure of 56.0 fell down to 53.8 in February, whilst analysts’ expectations had pointed towards a smaller reduction to 54.8. As the PMI Services figure remained above the 50 mark that separates growth form contraction, the slightly worse than expected score still signals good news for the Pound as the UK economy seems to be picking up.
The British Chamber of Commerce has predicted that the positive recent economic releases will prove strong enough to keep 2012 Q1 GDP out of the red, and ensure that the UK does not slip into a technical recession. The Pound to Euro Exchange Rate is currently trading at 1.198 (11:10 GMT) suffering a 0.20% reduction on the day.
The second instalment of cheap ECB loans has been earmarked as a positive factor for the Pound; as the largest financial centre in the world, the City of London is set to benefit from a pronounced increase in revenue. The Pound to Euro Exchange Rate could be set to rise in 2012 further into the 1.2’s but expect short-term fluctuations to remain just above or below the GBP/EUR 1.200 figure.
German PMI Services fell from 53.7 to 52.8, beating market expectations of 52.6 by 0.2 points. The PMI Services for the Eurozone as a whole shrunk from 50.4 to 48.8, a worrying signal that could potentially point towards a technical recession for the 17-nation bloc. The Sentix Investor Confidence improved slightly from -11.1 to -8.2, but the negative figure corroborates the growing concerns that the Eurozone could slip into recession. On the plus side Eurozone Retail Sales improved by 0.3% in January, following a fall of -1.3% in December. The Euro to US Dollar Exchange Rate retraced its losses from earlier in the day following the stronger than expected Retail Sales figures. The EUR/USD Exchange Rate currently stands at 1.318 (11:35 GMT).