The Pound Euro exchange rate is steadily gaining this morning despite a sharp growth in the UK’s construction sector.
At the time of writing the GBP/EUR pair are currently trading at around 1.1562, the pairing has steadied after significant losses at the beginning of the week.
Pound (GBP) Steadily Gaining after UK Construction PMI Data
The Pound is steading gaining against the Euro this morning after the release of the UK’s construction PMI for March.
The construction PMI jumped to 61.7 in March, from 53.3 the previous month and recorded the sharpest construction output pace since 2014.
Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply commented on the growth:
‘Construction was full of the joys of spring in March with a sudden leap into solid growth fuelled by across the board rises in workloads in all sectors. The commercial pipeline was particularly spectacular giving its best performance since late-2014.’
‘This upturn led to a significant boost in hiring levels with the fastest upturn in job creation since December 2018 offering a clear sign that companies are feeling more positive in planning for new builds and refurbishments of current properties.’
Even more so, despite concerns over the safety of the AstraZeneca vaccine in the UK, investors remain optimistic surrounding the UK’s vaccine rollout and subsequent economic recovery following the introduction of the Moderna vaccine across the country.
Euro (EUR) Finds Support in Eurozone Construction PMI
The Euro has found limited support against the Pound this morning following a fractional growth in the Eurozone’s construction sector for March.
Although in contraction territory, the latest decline was the slowest since last October coming in at 49.3.
Usamah Bhatti, an economist at IHS Markit, commented on the data saying:
‘Eurozone construction companies reported fractional growth in March, marking for the first increase since the pandemic disrupted activity across the bloc throughout 2020.’
‘Incoming business also expanded in the latest survey period, as the appetite for new construction projects in the Eurozone began to return, reportedly in public sector work.’
The Eurozone is still struggling against the third wave of the coronavirus pandemic plaguing the bloc and the Euro finds any gains against the Pound limited, a trend which could continue until the Eurozone’s vaccination rollout pace increases.
Pound Euro Exchange Rate Outlook: German Trade Surplus to push Euro Higher?
For Euro investors, tomorrow will see the release of the Germany’s balance of trade data for February which is forecast to increase to €21.5B. If the figure meets forecasts the Euro could see itself heading higher.
For Pound traders, the UK’s vaccine rollout will be in focus heading into the weekend in absence of any notable data, any indication that the rollout could slow after the announcement under 30’s would receive an alternative to the AstraZeneca vaccine could cause the Pound to suffer.
The GBP/EUR exchange rate will continue to be driven by any further coronavirus developments over the weekend, with the European Commission saying that all adults in the Eurozone will be offered a dose of the coronavirus vaccine by the end of June, investors will look to see if the vaccine rollout begins to pick up.