- Pound (GBP) looks to services PMI
- Relations deteriorate between UK & France over-fishing
- Euro (EUR) rises weaker manufacturing PMIs
- Eurozone unemployment, Christine Lagarde to speak
The Pound Euro (GBP/EUR) exchange rate is rebounding after two days of decline .The pair settled -0.13% lower on Tuesday at €1.1756 in a relatively quiet session. At 05:45 UTC, GBP/EUR trades +0.11% at €1.1767.
The Pound remained under pressure on Tuesday in a continuation of Monday’s selloff. The Pound struggled to gain traction amid lingering Brexit concerns and ahead of the Bank of England interest rate decision on Thursday.
The UK – France fishing row is threatening to spill over in a trade and legal battle. Talks between UK Brexit minister Lord David Frost and French minister of state for European affairs Clement Beaune are due to start tomorrow. France have agreed to hold off on sanctions until after the talks.
Looking to the BoE, this is set to be one of the most unpredictable monetary policy decisions in years. Pound investors will be looking firstly to see if there is a rate hike and secondly what the vote spilt is.
Today attention will be on the service sector PMI, the final reading for October. Analysts are expected growth to have accelerated in October to 58, up from 55.4, boding well for economic growth at the start of the fourth quarter.
The Euro edged higher versus the Pound despite weaker than forecast manufacturing PMI data for both the Eurozone and Germany. Germany’s figure was the most disappointing at 57.8, down from 58.4 in September and also came in short of the flash reading of 58.2.
Meanwhile, Eurozone manufacturing PMI was also below the flash estimate at 58.3, down from 58.6 in September. Whilst the reading is still firmly in expansion, it suggests that supply chain issues dragged slightly on output.
Today the Eurozone economic calendar is quiet with just Eurozone unemployment figures due. European Central Bank Governor Christine Lagarde is due to speak. Her speech comes after last week’s ECB meeting and after Friday’s fresh inflation reading.
