- Pound (GBP) rises after falling across last week
- UK retail sales and PMI numbers impress but Brexit concerns linger
- Euro (EUR) supported buy improving outlook
- Eurozone PMI data up next.
The Pound Euro (GBP/EUR) exchange rate is rising at the start of the new week. The pair shed 0.6% across the previous week, settling on Friday at €1.1465. At 05:15 UTC, GBP/EUR trades +0.14% at €1.1481.
Despite stronger than forecast UK data, the Pound failed to push higher towards the end of last week.
Data on Friday revealed that UK retail sales surged in March as consumers prepared for the end of lockdown. UK retail sales jumped 5.4% month on month in March, well up from February’s 2.2% and also firmly ahead of forecasts of 1.5%.
The good news didn’t stop there with UK PMI data also printing well ahead of forecasts. Activity in the manufacturing sector which has remained resilient posted another strong month of expansion in April at 60.7. Analysts had expected a level of 59, whereby 50 separates expansion from contraction.
The service sector was a notable outperformer as the economy re-opened at the start of April. The service sector PMI came in at 60.1, also ahead of the 59 expected. The service sector is the sector that has been hardest hit by covid and lockdown restrictions.
Whilst data has been impressive, this has been overshadowed by Brexit woes. Concerns surrounding the impact of Brexit on Northern Ireland remain. Tensions between Britain and the EU are also rising.
The outlook for the Euro has been gradually improving which has boosted the common currency. The vaccination programme in the bloc is accelerating after a slow start. Furthermore, Eurozone PMI data was also largely above forecasts.
The Eurozone composite PMI which is considered a good gauge of business activity in the region rose to 53.7 in April, up from 53.2 in March. Analysts had expected a slight tick lower to 52.8.
Today the Eurozone calendar will remain in focus with the release of German IFO business sentiment data. Forecasts are for a tick higher in business morale.