Euro Pound (EUR/GBP) Exchange Rate Muted as UK Construction Rises for First Time since January
The Euro Pound Sterling (EUR/GBP) exchange rate remained muted and the pairing is currently trading at an inter-bank rate of £0.8582.
UK construction rose for the first time since January aided by house building which was reported to be the strongest performing area.
The PMI edged up to 50.5 in April from the previous month’s reading of 49.7.
Commenting on this, Group Director at the Chartered Institute of Procurement and Supply, Duncan Brock said:
‘The strongest rise in residential building since December 2018 was the only saviour of a sector otherwise heading for contraction again this month as deferred client decisions continued to impact on larger commercial and infrastructure projects, throwing the industry off-balance.
‘With the fastest rise in input costs since November 2018, material shortages, and stagnating workloads, the sector is slowly coming to terms with this new landscape of Brexit stalemate and its impacts with business optimism going through its worst phase since 2013.’
Euro (EUR) Flat as German Manufacturing PMI Close to 80-Month Low
German manufacturing PMI edged up in April to 44.4 from March’s low of 44.1.
However, this still remained close to March’s 80-month low and was still the second-quickest fall in over six-and-a-half years.
Added to this, the degree of pessimism from manufacturers was the greatest seen since November 2012 which likely dampened sentiment in the single currency.
Commenting on the data, Principal Economist at IHS Markit, Phil Smith said:
‘April saw the manufacturing PMI tick up for the first time in nine months thanks to slower falls in output and new orders, but we perhaps won’t have a clear picture of whether the sector’s downturn has bottomed out until the May flash results are published later this month.
‘The struggles in the car industry continue to ripple through the German manufacturing sector. From electronics and chemicals, to basic metals and machinery, firms in almost all sectors are reportedly feeling the effects of the automotive slowdown.’
Euro Pound Outlook: Will the EUR/GBP Exchange Rate Rise on Better-than-Forecast Eurozone Inflation?
Looking ahead to this afternoon, the Pound (GBP) could fall against the Euro (EUR) following the release of the Bank of England’s (BoE) interest rate decision.
If the BoE holds interest rates steady, but the monetary policy minutes reveal the bank’s tone is dovish and hints of a possible rate cut later in the year, Sterling could fall.
On Friday the single currency could edge up against the Pound following the release of the preliminary Eurozone Consumer Price Index (CPI).
If CPI rises higher than forecast, the Euro Pound Sterling (EUR/GBP) exchange rate could rise.