GBP/EUR Exchange Rate Muted Following UK Construction PMI
The Pound Euro (GBP/EUR) exchange rate is trading in a narrow range this morning, following the publication of the UK’s latest construction PMI.
At the time of writing the GBP/EUR exchange rate remains virtually unchanged this morning, but remains roughly half a cent lower than Wednesday’s closing rate.
Pound Euro (GBP/EUR) Exchange Rates Steady on PMI Data
The Pound (GBP) is range bound against the Euro (EUR) this morning, with the release of the UK’s latest construction PMI.
According to data published by IHS Markit, activity in the UK’s construction sector experienced a moderate slowdown in growth last month, with the index sliding from 53.4 to 52.9.
This slowing of growth was attributed to ongoing Brexit uncertainty, which resulted in weak demand for new housing and commercial projects.
Howard Archer, Chief Economic Adviser at EY Item Club said:
‘It is evident that there are significant headwinds currently hampering the construction sectors’ upside.
‘Some clients’ willingness to commit to major new projects (particularly in the commercial sector) is currently being limited by Brexit uncertainties and a subdued domestic economy.’
At the same time the Euro is struggling to find any momentum against the Pound today amidst a lull in notable Eurozone data, but is rallying against many of its other peers amid a correction in currency markets following a spasm in FX trading overnight.
GBP/EUR Exchange Rate Forecast: UK Service Sector PMI to Drag on Sterling Sentiment?
Looking ahead, movement in the Pound Euro (GBP/EUR) exchange rate in the tail end of the week is likely to be driven by the release of the UK’s latest services PMI.
With the UK’s service sector accounting for over 80% of the UK’s economic growth its performance can have a major impact on Sterling
Unfortunately for GBP investors however, economists currently forecast that the sector will have struggled again in December, with the PMI expected to show that it remained dangerously close to the point of contraction at the very end of 2018.
Meanwhile EUR investors will likely be focused on the publication of the Eurozone’s latest CPI figures, with a continued slowdown in inflation in December potentially dampening hopes of a rate hike from the European Central Bank (ECB) sometime in 2019.