- Pound (GBP) is unchanged after gains yesterday
- Services PMI is downward revised to 50.5
- Euro (EUR) is unchanged after PMI data
- The Eurozone composite PMI fell & input costs jumped
The Pound-Euro (GBP/EUR) exchange rate is holding steady after gains yesterday. The pair rose 0.10% in the previous session, settling on Monday at €1.1467. The pair traded between €1.1443 and €1.1475. At 11:30 UTC on Tuesday, GBP/EUR trades 0.01% at €1.1470.
The pound is unchanged against the euro on Tuesday as investors continue to assess developments in the Middle East and their potential impact on the UK economy.
Data showed that businesses in Britain’s dominant services sector saw the largest month-on-month increase in costs since 2021 in March, driven by higher energy and transportation prices, underlining the inflationary risks stemming from the Iran war.
According to the latest S&P Global Services PMI, the UK services index fell to 50.5 in March from 53.9 in February. This was below the preliminary reading of 51.2 and marked the lowest level in 11 months.
The composite PMI, which is considered a good gauge of overall business activity, was also revised lower to 50.3, down from 51.0. The 50 level separates expansion from contraction.
The gauge of input prices paid by British services firms jumped to 68.4 in March, up from 63.1 in February, marking the largest one-month increase since 2021.
This follows last week’s manufacturing data, which showed the largest month-on-month increase in input costs since October 1992.
The euro is also little changed, even as data showed the euro area services sector slowed sharply.
The eurozone services PMI fell to 50.2 in March, down from 51.9 in February, and was close to the preliminary estimate of 50.1, marking the weakest reading since May last year.
Looking beneath the headline figure, demand conditions deteriorated, with new business falling for the first time since July 2025 and at the fastest pace in 16 months. Export sales also declined more sharply.
Business confidence weakened significantly, falling to a 10-month low, as uncertainty surrounding the impact of the Iran war weighed on sentiment.
At the same time, cost pressures intensified, with input price inflation accelerating to a 34-month high.
