- Pound (GBP) flat but gains across the week
- UK services PMI and retail sales due
- Euro (EUR) steady ahead of PMI data
- EZ consumer confidence improved
The Pound Euro (GBP/EUR) exchange rate is trading flat after gains in the previous session. The pair rose +0.10% in the previous session, settling on Wednesday at €1.1342, after trading in a range between €1.1329 – €1.1361. At 08:45 UTC, GBP/EUR trades 0% at €1.1343. The pair is set to rise 0.5% across the week.
The pound fell yesterday on a quiet day on the economic calendar, after a busy start to the week. The pound still trades higher across the week so far after UK CPI data showed that inflation remained in double digits for a seventh straight month and after UK wage growth was stronger than expected, keeping pressure on the Bank of England to continue hiking interest rates.
Today UK data remains in focus with the release of retail sales data, which is expected to show that sales fell by -0.5% month on month in March after falling 1.2% in February. Falling sales highlight the squeeze that households are under.
Business activity data, will also be in focus with the release of manufacturing, service sector, and composite PMI data for April is due to be released. The services PMI is expected to hold steady at 52.9 where level 50 separates expansion from contraction. The manufacturing PMI is expected to contract at a slower pace of 48.9, up from 47.5. Weaker than forecast data could weigh on the pound.
The euro rose yesterday as investors digested stronger-than-expected consumer morale in the region. Consumer confidence ticked higher to -17.5 in April up from -19.1 and better than the -18.5 forecast. This level is historically linked to falling household consumption, but the upward movement does point to a light at the end of the tunnel.
Looking ahead, eurozone business activity data will be in focus with the release of the composite PMI, which is expected to hold steady in April at 53.7, as service sector growth slows slightly and the manufacturing sector contracts at a slower pace as well.
