The Euro Pound Exchange rate has been poor so far this week but could bounce back today, given the optimistic estimates for incoming PMI results.
- Euro interest limited despite inflation figures – Unexpected services drop lowers EUR value
- Increase in activity fails to reassure EUR investors – PMIs indicate strong close to 2016
- Pound bolstered by rising manufacturing PMI – Diplomat’s resignation fails to dent GBP appeal
- Eurozone retail results forecast to jump out of contraction – Sterling gains expected if services PMI pulls through
For Sterling, advances against the Euro have come from a pair of forecast-beating PMI printings, which have cancelled out any negativity from a recent diplomatic resignation.
EUR GBP Exchange Rate Weakness Follows Services Stats despite Rising Eurozone Inflation
The Euro Pound exchange rate lost out during trading yesterday, through the overall spread of domestic data wasn’t negative.
The earliest results showed no change in December’s French consumer confidence, as well as a sizable drop in Spain’s number of unemployed during the same month.
The actual starters for data-hungry investors, however, were Eurozone-wide services and composite PMIs for December, which respectively dipped and rose in their finalised forms.
Although the main course, the December inflation rate flashes, both rose in the Eurozone, investors remained hesitant about committing to the EUR, which left the Euro to fall by the wayside against Sterling.
Pound Euro Exchange Rate Stable This Week on Manufacturing PMI Windfall
While the GBP EUR exchange rate has made rare dips into negative ranges this week, Sterling has nonetheless remained in demand against the Euro overall.
The Pound has been aided in its endeavours by Tuesday’s manufacturing PMI and Wednesday’s construction PMI both rising above forecasts in December; economists have been quick to warn that this is not necessarily a clear indicator of how the sectors will fare in 2017, however.
Other major UK news this week has concerned future Brexit negotiations; Sir Ivan Rogers, the UK Ambassador to the EU, has resigned, leaving the Government in a lurch about who should be his successor.
Rogers left because of objections to Government stances on Brexit, therefore it is likely that the new Ambassador may be a strongly pro-Brexit figure.
Future EUR GBP Forecast: Potential for Euro Advance if Eurozone Retail Climbs Out of Contraction
Purchasing Managers Indexes (PMIs) remain at the top of the agenda today; the Eurozone retail PMI for December is out this morning and is expected to show a rise out of contraction from 48.6 to 50.5.
The UK’s major December services PMI, out slightly later, is also due to rise, though with a less impressive increase from 55.2 to 55.4 on the cards.
Recent Interbank Exchange Rates
At the time of writing, the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.85 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.17.
