- Pound (GBP) rises, adding to last week’s gains
- UK Composite PMI rose to 53.2 in March
- Euro (EUR) falls despite signs of stabilization in the economy
- Manufacturing PMI rose to a 26-high
The Pound Euro (GBP/EUR) exchange is rising, adding to last week’s gains. The pair rose 0.48% in the previous week, settling on Friday at €1.1941. It traded between €1.1862 and €1.1977. At 10:30 UTC, GBP/EUR is trading 0.08% at €1.1951.
The pound is rising after upbeat data for the UK economy painted a more encouraging backdrop for Chancellor Rachel Reeves ahead of her Spring Statement on Wednesday.
The UK service sector picked up in March. According to the S&P Global Services, PMI activity in the sector rose to 53.2 in March, up from 51.0 in February.
However, the manufacturing sector saw activity drop to an 18-month low of 44.6 in March, down from 46.9 in February, as worries over a global trade war hit expectations for future output. Delving deeper into the data, manufacturing export sales experienced the largest fall since August 2023.
Meanwhile, the overall UK composite PMI rose to 52.00, a six-month high, up from February’s 50.5.
The data will be received by Chancellor Rachel Reeves ahead of her Spring Statement, especially after the UK GDP contracted -0.1% MoM in January.
The EUR is edging lower despite today’s PMI data hinting at stabilization and possible green shoots of economic recovery.
The composite PMI, which is considered a good gauge for business activity, rose to a seven-month high of 50.4, supported by a notable improvement in manufacturing activity. The manufacturing PMI rose to 48,7, its highest level in 26 months. Europe’s drive in defence and infrastructure could offer hopes of a more sustained recovery.
However, service sector activity slipped slightly to 50.4 from 50.6. This remained above 50, the level that separates expansion from contraction. Prices paid in the service sector are easing, although price pressures in manufacturing remain, which could make some ECB policymakers more cautious about cutting rates aggressively.