- Pound (GBP) rises snapping a three day losing streak
- Manufacturing activity grew at slowest pace since February
- Euro (EUR) was boosted by falling US Dollar despite weak data
- Eurozone PPI inflation in focus
The Pound Euro (GBP/EUR) exchange rate is rising higher on Thursday snapping a three day losing run. The pair settled -0.12% lower in the previous session at €1.1631, towards the low of the day. At 05:45 UTC, GBP/EUR trades +0.03% at €1.1636.
The Pound ticked lower in the previous session following the release of UK manufacturing PMI data for August. The PMI revealed that manufacturing activity expanded at a slower pace in August compared to July, ticking lower to 60.3 down from 60.4. Whilst the figure is still well above 50 which separates expansion from contraction this marked the slowest pace of growth since February as severe supply chain disruptions and shortages of raw materials eroded growth momentum.
Supply chain disruptions included port capacity issues, shipping delays internationally and the re-imposition of covid measures at sone key points along the global supply chain. Car manufacturing in Britain was at its lowest July level in almost half a century as staff shortages and chip shortages added to the other supply chain issues.
Today there is no high impacting UK data. News that some vulnerable people in the UK will receive COVID booster shots is keeping the mood towards sterling buoyant.
The Euro closed higher thanks to a weaker US Dollar. The greenback fell sharply following weaker than forecast ADP employment data. The Euro trades inversely to the US Dollar.
The greenback boost helped the Euro shrug off weaker than expected German retail sales and a downward revision to the manufacturing PMI.
German retail sales plunged -5.1% month on month in July after jumping 4.2% in June. Analysts had expected a 0.9% decline. The data suggests that the consumer driven recovery could be slowing.
The European economic calendar is light with inflation at wholesale level (Producer Price Index) likely to be the central focus. Expectations are for a rise of 1.1% MoM
