- Pound (GBP) is flat after modest losses yesterday
- House prices fell & manufacturing PMI was revised higher
- Euro (EUR) is steady on Labour Day holiday
- ECB is likely to cut rates in June
The Pound Euro (GBP/EUR) exchange rate is holding steady. The pair fell -0.04% in the previous session, settling on Tuesday at €1.1709 and trading in a range between €1.1676 and €1.1724. At 10:00 UTC, GBP/EUR trades +0.01% at €1.1710.
The pound is unchanged in a relatively quiet session as investors digest the manufacturing PMI data as well as the latest house price figures.
According to the lender Nationwide, house prices fell unexpectedly for a second month running last month, dropping 0.4% after a 0.2% decline in March. Economists had expected a 0.2% month on month increase.
In annual terms, house price growth is 0.6%, down from 1.6% in March. The data points to a moderation in the recent recovery in housing market activity, which also saw mortgage approvals rise to the highest level since September 2022.
Meanwhile, manufacturing PMI data was upwardly revised from the preliminary reading in April. The manufacturing PMI came in at 49.1, upwardly revised from the earlier reading of 48.7 but still down from March’s 50.3. The data confirms that the manufacturing sector slipped back into contraction last month, below the 50 level.
Meanwhile, the euro was inching relatively unmoved on Wednesday, given the Labour Day bank holiday in many European countries.
Still, the euro had fallen 0.1% against the pound in April, marking the second straight monthly decline. The euro remains pressured by the prospect of the ECB being the first central bank to cut interest rates.
With inflation cooling to 2.4% the ECB has signalled that it could look to cut rates as soon as June should inflation continue to trend lower. Data has also pointed to the eurozone economy recovering from its recent downturn after rising GDP rose 0.4% quarter on quarter in Q1.
There is no high-impacting eurozone economic data due to be released today. Tomorrow, the eurozone manufacturing PMI is expected to confirm the preliminary rating of 45.6, down from 46.1.
