GBP/EUR: Pound Higher With UK & EZ PMI’s In Focus

The pound pushed higher versus the euro on Monday in a volatile session as central bank’s across the globe stepped into action. The pound versus euro exchange rate traded a range of €1.1436 – €1.1514 before closing the session up 0.3% at €1.1471.

Sterling is extending those gains in early trade on Wednesday. At 06:45 UTC, GBP/EUR is trading 0.2% higher at €1.1484.

Will Service Sector PMI Drag Pound Lower?

The pound was on the front foot for a second straight session versus the euro, despite the Bank of England, earlier in the week pledging to take all the necessary steps to protect stability In the UK economy. This came on the back of persistent uncertainty surrounding the EU – UK trade relationship and amid growing fears of a no trade deal Brexit.

Uk economic data – construction PMI helped underpin the pound. Data showed that UK construction output rose at its fastest pace in over a year in February. The IHS Markit/ Cips construction PMI jumped to 52.6 in February, up from 48.4 in January. The figure 50 separates expansion from contraction. Adding to the optimism, new orders rose at the fastest pace since 2015 as sentiment continued to improve following Boris Johnson’s win in the elections.

Today service sector data will be in focus. Activity in the service sector is expected to have slowed slightly to 53.2, down from 53.3 in January. In addition to the data investors will continue to monitor the coronavirus outbreak in the UK after Ryanair and British Airways cancel more flights.

Fed Cut, Will ECB Too?

The euro slipped versus the pound on Tuesday, as investors focused their attention on the European Central Bank and attempt to gauge what action the central bank will take when it meets next week.

After US Federal Reserve Chair Jerome Powell made an emergency 50 basis point cut to US interest rates late yesterday and the Reserve Bank of Australia also slashed rates, investors are laser focused in central bank action. The ECB have limited options given that rates are already so low, however the market is staring to price in a 10 basis point cut.

In additional to coronavirus updates there is a slew of data to keep euro investors occupied including retail sales, German retail sales, Italian GDP and eurozone service sector PMI.

Currencylive.com is a news site only and not a currency trading platform.

Currencylive.com is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views.