The Euro Pound (EUR/GBP) exchange rate has been pushing higher for much of the day following the release of the latest manufacturing PMI’s from both the UK and Eurozone.
At the time of writing the EUR/GBP pairing are trending around the £0.8593 level as the Euro finds further support from the current US Dollar (USD) weakness.
Euro (EUR) Steady Despite Disappointing German Retail Sales
The Euro has found itself steady against the Pound throughout the day despite disappointing retail sales figures from Germany.
Retail sales in the Eurozone’s largest economy contracted -5.1% during July as consumers became more concerned over rising cases of the delta variant of coronavirus.
The latest Eurozone manufacturing PMI for August had shown that growth in the sector slowed to a six-month low.
The manufacturing PMI came in at 61.4 during August, a slowdown from 62.8 the month previous.
Chris Williamson, Chief Business Economist at IHS Markit commented on the latest PMI, saying:
‘Eurozone manufacturers reported another month of buoyant production in August, continuing the growth spurt into its fourteenth successive month. The overriding issue was again a lack of components, however, with suppliers either unable to produce enough parts or are facing a lack of shipping capacity to meet logistics demand.’
‘These supply issues were the primary cause of a shortfall of manufacturing production relative to orders of a magnitude not previously recorded by the survey, surpassing the 24-year record deficit seen in July.’
Pound (GBP) Struggles for Direction on UK Manufacturing PMI
The Pound has been struggling across the board today despite a better-than-expected UK manufacturing PMI.
The UK manufacturing PMI came in at 60.3 during August, slightly lower than the month’s previous of 60.4.
Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply commented on the latest PMI reading:
‘August’s results were almost a carbon copy of the previous month where recovery for manufacturers continued, but there were signs of stagnation and the rise in overall activity slipped back to the weakest for half a year.’
‘Businesses were thwarted by brittle supply chains struggling with shortages, port and transportation difficulties as delivery times stretched not to days or weeks, but months for some goods.’
Euro Pound Exchange Rate Outlook: Services PMI in Focus
For both the Euro and Pound, Friday will see the release of the latest serviced PMI from the currencies respective economies.
Dependent on the result of the figures the EUR/GBP pairing could trade in a mixed range for much of the day.
The Euro Pound exchange rate will continue to be driven by any further coronavirus developments in the coming days.