- Pound (GBP) falls for a fourth straight day
- UK services PMI was revised higher to 53.7
- Euro (EUR) rises despite a downward revision to services PMI data
- PPI rose 0..8% MoM
The Pound Euro (GBP/EUR) exchange rate is falling for a fourth straight day. The pair fell 0.03% in the previous session, settling on Tuesday at €1.1872 and trading in a range between €1.1853 and €1.1899. At 18:00 UTC, GBP/EUR trades -0.04% at €1.1867.
The pound is edging lower despite data showing the UK economy is holding up better than expected in August.
UK services activity data, as measured by the services PMI, was upwardly revised to 53.7 in August from 53.5 in July. This was also the strongest level of expansion for the dominant sector in 4 months.
The economy continued to benefit from the more stable political picture, as well as falling inflation and interest rates.
The BoE cut interest rates by 25 basis points in August to 5% as inflation cooled to the BoE’s target level. However, solid growth, particularly in the service sector, could prove to be an obstacle to further rate cuts. UK service sector inflation has remained stickier than what the BoE would have liked.
The euro is edging higher despite a downward revision to the eurozone service sector PMI and after business activity performed worse than expected in August. The eurozone services PMI was downwardly revised to 52.9 from 53.3. However, it’s worth noting that the service sector expansion that was seen came from France, which benefited from the Olympics.
The data comes after manufacturing activity was revised downward earlier in the week. The business composite PMI, which is widely considered a gauge for business activity, was also revised lower to 51 from 51.2.
Separately, eurozone wholesale inflation data, which is measured by the producer price index, rose by 0.8% month on month, a stronger increase than the 0.3% forecast and up from a 0.6% rise in the previous month. Meanwhile, on an animal basis PPI fell -2.5%.
