The Pound Euro exchange rate is being supported today after the UK services PMI recorded a strong rebound during March.
At the time of writing, the GBP/EUR pairing is trading at around 1.1641.
Pound (GBP) Supported by UK Services PMI Growth
The Pound is being supported today following the final reading of the UK services PMI for March.
At 56.3, missing forecasts of 56.8, the services PMI passed into growth level for the first time since October 2020.
‘UK service providers were back in expansion mode in March as confidence in the roadmap for easing lockdown restrictions provided a strong uplift to new orders.’
‘Total business activity increased at the fastest rate since August 2020 and this return to growth ended a four-month sequence of decline.’
Investors remain optimistic surrounding the UK’s economic reopening and recovery in the coming months.
The first doses of the Moderna vaccine have been given in the UK today, adding further support to the Pound’s sentiment.
Euro (EUR) Slightly Higher as Eurozone Private Sector Returns to Growth
The Euro is slightly up against the Pound this morning following the release of the latest Eurozone Composite PMI reading.
The index returned to growth territory coming in at 53.2 the highest level since July of 2020.
Chris Williamson, Chief Business Economist at HIS Markit commented on the data:
‘The survey indicates that the economy has weathered recent lockdowns far better than many had expected, thanks to resurgent manufacturing growth and signs that social distancing and mobility restrictions are having far less of an impact on service sector businesses than seen this time last year.’
Euro investors are beginning to become cautiously optimistic surrounding the Eurozone’s economic recovery.
Reports from the European Commission that all adults will receive a vaccine by the end of June added further support.
Pound Euro Exchange Rate Outlook: Construction PMIs in Focus
For Pound investors tomorrow will see the release of the final construction PMI reading for March from the UK.
The PMI is expected to show a modest increase of 1 point which would continue the solid overall growth in the sector which could push Sterling higher.
Euro traders will themselves be focused on the Eurozone construction PMI for March which is expected to increase 7 points in the sector.
If the PMI meets forecasts the sector will move back into growth territory which would add increased support to EUR.
The Pound Euro exchange rate will continue to be driven by any further coronavirus developments.
Any improvement in the Eurozone’s vaccine rollout would push the Euro higher.