- Pound (GBP) edged lower as lockdown approaches
- Manufacturing PMI showed recovery continued in October
- Euro (EUR) edges high across the board even as covid spreads further
- Manufacturing PMI data revealed Germany’s factories are booming
The Pound Euro (GBP/EUR) exchange rate is edging marginally lower on Tuesday, after treading water in the previous session. The pair settled flat on Monday at €1.11 after slipping as low as €1.1050. At 05:15 UTC, GBP/EJR trades -0.1% at €1.1090.
The Pound is slightly depressed as investors look ahead to the month long lockdown which is due to begin on Thursday in a bid to stem the spread of covid-19. The Pound is shrugging off news that the UK will pilot a new mass testing approach in Liverpool this week.
Thursday will also see the Bank of England announce its monetary policy announcement. There are growing expectations that the central bank will ease monetary policy further, to support the UK through a very difficult few months.
There is no high impacting UK data due to be released today. Yesterday, UK manufacturing PMI revealed that activity in the manufacturing sector remained resilient. The IHS Markit/CIPS PMI slipped slightly in October to 53.7, down from 54.1 in September. However, the results beat the initial print of 53.3. The figure 50 separates expansion from contraction.
The data reveals that the sector continued its recovery, although lost some momentum amid tightening lockdown measures. This could weaken further as the UK heads into full scale lock down.
The Euro is eking our gains across the board in early trade on Tuesday despite the resurgence of covid cases in the old continent and as France and Germany, the Eurozone’s largest economies head into a month-long lockdown.
Data wise the Eurozone economic calendar is light today. Yesterday, the Eurozone reported strong manufacturing growth in the month of October. The recovery was mostly driven by Germany as data highlights the divergences between Eurozone economies as the recovery continued. However, with the powerhouse of Europe heading back into lockdown a heavy blow to the recovery can be expected this month.