- Pound weakened further by disappointing construction outcome
- Euro similarly unsettled by retail sales results
- Both currencies remain vulnerable to UK Referendum shocks
- ECB’s Weidmann’s speech may include further ‘Brexit’ comments
Double Dose of Disappointment for GBP and EUR Today
The Pound’s misfortune has continued today, with the latest UK PMIs concerning construction showing a second consecutive drop since yesterday’s disheartening manufacturing outcome. Sterling has dropped to a worse -0.3% against the Euro, although some of its scant daily gains still remain intact.
The Euro has not escaped from negative data either; while earlier PMIs gave some cause for relief due to their remaining in positive ranges, the most recent Eurozone retail sales results for March have dropped on both the month and the year.
The Pound Sterling (GBP) has been an uncertain prospect so far today, with gains being few and far between against a majority of its peers.
The Euro (EUR) has made more positive movement overall, although it too has been trending tightly against a number of rivals.
UK Economic News: Negative Aftermath of Manufacturing Data Weakens GBP
The Pound (GBP) has been generally weak against its peers today, with losses primarily stemming from yesterday’s extremely worrying drop into a contraction range for UK manufacturing in April.
In response to the news, Cardiff Business School Professor, Patrick Minford, triggered a new referendum argument after foretelling the end of UK manufacturing, but framing the outcome as a positive for the UK. In a concerning statement for UK manufacturers and their employees, Minford said that:
‘If we left the EU, it seems that we would mostly eliminate manufacturing’.
Mindford, who supports leaving the EU, argued that with reduced production within the UK, the cost of importing products from the continent would be lessened. ‘Remain’ campaigners have attacked the professor ‘sacrificing’ jobs and livelihoods in the North East economy.
Movements of note for the Pound have included a dip against the Euro (GBP/EUR), a worse drop of -0.4% against the US Dollar (GBP/USD) and a rise of 0.4% against the New Zealand Dollar (GBP/NZD).
Euro (EUR) Remains Steady after Limited Eurozone PMI Movements
The Euro (EUR) has made fairly positive progress against its peers today, having recorded gains of 0.2% against the Pound Sterling (EUR/GBP), 0.4% against the New Zealand Dollar (EUR/NZD) and 0.9% against the South African Rand (EUR/ZAR).
The biggest Eurozone news of the day has concerned composite and services PMIs for April, coming from France, Germany and the Eurozone as a whole, among others. France’s outcomes have risen in both cases, while Germany’s have fallen. In the Eurozone, a minor slide has been seen for the composite figure while a reprint at 53.1 has taken place for services.
Future GBP, EUR Forecast: Eurozone Retail Sales and ECB Speech due Today
The next Eurozone data to have an impact on the GBP/EUR pairing will be out imminently, in the form of the Eurozone retail sales results for March. Current forecasts have been slightly pessimistic.
Later on in the morning, European Central Bank (ECB) official Jens Weidmann is expected to give a speech.
The next UK announcement due out will be tomorrow morning’s crucial services PMI for April.
Current GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2628 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7919 today.