The pound euro (GBP/EUR) exchange rate is rising for a third straight session and has pushed above €1.1600 as the market digests PMI data.
The pound is recovering from a quiet start after PMI data showed that the UK dominant service sector grew at a faster pace than expected at 53.4, up from 50.9 in November.
A strong service sector could fuel bets that the BoE will keep rates high for longer.
The eurozone service sector PMI was also revised higher to 48.8 in December, up from 48.7 in November. The level 50 separates expansion from contraction.
Attention now turns to German inflation data, which is expected to rise to 3.7% YoY up from 3.2%. Hot inflation could see the market rein in rate cut bets and boost the EUR.
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