As the European session progressed the Euro retained declines against the US Dollar and continued to trade close to a two-month low against the Pound despite a report showing that manufacturing PMI in the Eurozone hit a 26-month high of 51.4 in August.
The Euro to Pound Sterling Exchange Rate is currently trading in the region of 0.8486 as of 11:00 GMT
Economists forecast that the gauge of manufacturing would hold at 51.3 in August, but it actually rose to 51.4 – edging further away from the 50 mark separating growth from contraction.
In a statement issued with the data Markit economist Chris Williamson commented: ‘Manufacturing in the Euro area continued to show signs of recovery in August. Although gains are still only modest, companies reported the strongest improvement in business conditions for just over two years, with a pickup in new orders growth suggesting the upturn will be sustained into September.’
Williamson continued: ‘What’s especially encouraging is that the upturn is broad-based, with PMI’s rising in all countries with the exception of France, where business conditions have at least stabilised after the steep downturn reported earlier in the year. […] Policymakers will be reassured by the data, which add to growing signs of a building recovery for the Eurozone recovery.’
The EUR/GBP Exchange Rate hit a low of 0.8459
Also positive was the news that Spanish manufacturing returned to growth for the first time in over two years.
As industry expert Howard Archer notes: ‘Looking ahead, the hope for manufacturers is that currently improving confidence in most Eurozone countries will encourage businesses to invest more, and also encourage consumers to spend more, particularly on durable goods.’
In spite of this positive news the Euro proved unable to recover ground lost against Sterling.
The British asset broadly strengthened in response to strong UK manufacturing and housing figures, and was further supported by the expectation that the Bank of England will opt to maintain its bond-buying stimulus program at its current level and hold the interest rate at 0.5 per cent when it meets later this week.
As the week progresses several influential pieces of economic data for the Eurozone, including Wednesday’s services/manufacturing PMI, GDP and retail sales figures, could inspire Euro volatility.
Current Euro (EUR) Exchange Rates
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The Euro/US Dollar Exchange Rate is currently in the region of: 1.3217 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8552 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4693 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6927 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7566 >
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1781 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6798 >
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.5907 >
(Correct as of 11:00 GMT)
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