- Pound (GBP) rises after losses yesterday
- UK consumer spending slowed in October
- Euro (EUR) is falling amid a quiet economic calendar
- ECB President Christine Lagarde will speak later
The Pound Euro (GBP/EUR) exchange rate is rising modestly after losses yesterday. The pair fell 0.17% in the previous session, settling on Monday at €1.1911 and trading in a range between €1.1872 and €1.1926. At 09:00 UTC, GBP/EUR trades 0.04% at €1.1915.
The pound is edging higher on Tuesday as investors digest mixed data.
Figures showed that UK consumer spending grew only modestly in October amid uncertainty ahead of the debut labor government budget. According to the British Retail Consortium, spending in shops rose 0.6% annually in October, below the 2% increase seen in September, marking the weakest rise since July. Separately, data from Barclays also showed softer growth in consumer spending last month.
Meanwhile, the UK service sector activity grew at a slightly slower pace in October, with the services PMI at 52, down from 52.4 in September. Although this was ahead of the preliminary reading of 51.8, the data still showed that the dominant UK sector lost momentum in the run-up to the budget, with business activity also growing at the weakest rate in 11 months.
The figures come ahead of the Bank of England’s interest rate decision on Thursday, where the central bank is widely expected to cut rates by 25 basis points.
The euro is edging lower on Tuesday after gains yesterday following upward revisions to eurozone manufacturing PMI figures. Data showed that the region’s manufacturing decline eased in October, with the PMI hitting a month-high. However, the sector still contracted for the 28th straight month.
Meanwhile, data today showed that unemployment in Spain increased by 26.8k compared to the previous month, marginally ahead of expectations of a 26.5k increase.
Today, the eurozone economic calendar is relatively quiet; instead, attention will be on a speech by ECB president Christine Lagarde, who could provide further insight into the outlook for growth inflation or interest rates for the region.
