- Pound (GBP) boosted by strong manufacturing PMI
- BoE rate decision moves into focus
- Euro (EUR) slipped owing to a strong US Dollar
- Eurozone service sector & composite PMI
The Pound Euro (GBP/EUR) exchange rate is. The pair settled up +0.25% at €1.1560 towards the high of the day. At 05:45 UTC, GBP/EUR trades % at €1.1525.
The Pound received a boost in the previous session from impressive UK manufacturing activity data. The manufacturing PMI for April printed above expectations growing at the fastest pace since 1994. The PMI came in at 60.9, ahead of the 60.7 that analysts had penciled in.
New orders continued to surge, hitting the highest level since November 2013 supported by the ongoing global economic rebound.
There is no high impacting UK data due for release tomorrow. Investors are instead turning their attention towards the Bank of England interest rate announcement on Thursday.
The central bank is not expected to adjust monetary policy. So, this means that the focus will be on BoE Governor Andrew Bailey’s tone. The UK is in a different position now than it was just a few months ago thanks to the rapid rollout of the vaccine and the easing of lockdown restrictions. Investors will be listening closely to see whether the central bank could be turning more hawkish.
The Euro came under pressure on Tuesday amid US Dollar strength and a quiet economic calendar. Today the economic calendar in the eurozone has plenty to keep investors engaged with service sector and composite PMI data for Germany, France and the bloc as a whole in focus.
These are the second readings so aren’t expected to be as market moving a preliminary reading, but they are closely watched non the less.
The service sector is the sector which has been most severely damaged by the pandemic is expected to show a small expansion in April, confirming the 50.1 preliminary read. The level 50 separates expansion from contraction.