Pound euro exchange rate dented following UK PMI
The pound euro (GBP/EUR) exchange rate is drifting lower this morning following the publication of the UK’s latest manufacturing PMI data.
At the time of writing, GBP/EUR is trading at around €1.1888, down roughly 0.3% from this morning’s opening levels.
Pound (GBP) wavers following UK PMI
The pound (GBP) is trading in a wide range this morning, down against several of its counterparts but holding steady against the remainder of its peers, as Sterling is being undermined by this morning’s economic data release.
October’s finalised manufacturing PMI printed below market expectations this morning, and fell from 51.5 to 49.9, entering the contraction zone (a reading below 50), and fell behind market forecasts of a more modest 50.3 reading.
The underwhelming reading has been primarily put down to worries over yesterday’s Autumn Budget, and marked the first decline within the sector since April 2024.
Rob Dobson, Director at S&P Global Market Intelligence comments:
‘UK manufacturing started the final quarter of the year on an uncertain footing amid speculation on government policies ahead of the Budget, which was widely reported to have led to a wait-and-see approach on investment and spending. This domestic headwind, combined with an ongoing loss of export business, led to the first outright contraction in new work intakes since April.’
This has seen Sterling struggle to catch bids in the wake of the release.
Euro (EUR) underpinned by domestic data
The euro (EUR) is managing to hold steady against the majority of its peers this morning despite the absence of any economic data releases scheduled for release today.
However, EUR exchange rates are remaining above ground regardless, supported by a number of upbeat data releases earlier in the week.
Both the Eurozone’s latest GDP reading and the latest set of inflation data printed to the upside this week, reducing European Central Bank (ECB) interest rate cut bets, underpinning the single currency through to today’s European session.
Pound euro exchange rate forecast: Eurozone PMI in the spotlight?
Looking ahead, the primary driver of movement for the pound euro exchange rate looking ahead to Monday will likely be the publication of the Eurozone’s finalised manufacturing PMI for October.
Although the latest index is expected to report a slight uptick in this month’s reading, the data is still forecast to report that the sector remained firmly in contraction territory (a reading below 50).
Should the data print as expected, this could see the common currency begin the week on the back foot against its peers.
Turning to the pound, UK data will be absent from Monday’s data-calendar, and as such, will likely see GBP exchange rates trade in line with market appetite for risk.
As an increasingly risk-sensitive currency, should the start of the week see markets move to upbeat trade, Sterling could be bolstered despite the lack of economic drivers.
Equally, should markets opt for safer assets instead, the pound could also begin the week on the defensive against its peers.