- Pound (GBP) treads water ahead of UK retail sales data
- UK business activity slowed slightly in March
- Euro (EUR) rose after better than forecast PMI data
- German IFO business sentiment data due.
The Pound Euro (GBP/EUR) exchange rate. The pair fell -0.8% in the previous session, settling on Thursday at €1.1987 and after trading a range between €1.1976 – €1.2025. At 05:45 UTC, GBP/EUR trades +0.00% at €1.1986. The pair is on track to gain 0.5% across the week after falling for the past two weeks.
The pound slipped in the previous session after the business reported the steepest rise in prices charged in over two decades. The composite PMI, which is considered a good gauge of business activity, slipped lower.
The composite PMI fell to 59.7 in March, down from 59.9 in February, a historic high. But his was still better than the 57.8 that analysts had forecast. While the service sector saw activity reach its highest level in 9 months, the manufacturing sector fell to its lowest level in 5 months. The outlook continues to sour amid worries over surging prices and slowing economic growth.
Looking ahead, UK retail sales data is in focus for February. Analysts are expecting sales to rise 0.8% month on month in February, after rising 1.9% in January. Sales are expected to slow as the cost of living squeeze tightens.
The euro gained yesterday after better than expected business activity data in the eurozone and after an EU leader’s meeting with Biden.
The eurozone composite PMI was 54.5 in March, down from 55.5 but ahead of the 54 that analysts had forecast. This remains well over 50, the level that separates expansion from contraction.
The data suggests that the surge in energy prices, which has been the most visible and immediate impact of the Ukraine war on the eurozone economy, is yet to really hit activity or weaken GDP data.
Today’s attention will be on German IFO business sentiment, which is expected to continue deteriorating as the Russian war continues. The IFO business confidence index is expected to fall to 94, down from 98.9.
