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Pound Euro 2017 Exchange Rate Sees Slight Benefit from UK Services PMI

  • Pound Euro 2017 Exchange Rate on 1.17 – Could advance if Euro weakens again
  • Final December Eurozone PMI Impress – But Euro struggles to capitalise
  • GBP Update: UK Services PMI Impresses – Sterling losses limited
  • Forecast: Eurozone Retail Sales on Friday – Strong results may bolster EUR demand

Pound Euro 2017 Exchange Rate Slips on Thursday

While it was largely able to hold above the level of 1.16, the Pound Euro 2017 exchange rate fell below the week’s opening levels on Thursday and failed to recover despite the day’s strong UK services PMI.

GBP EUR fluctuated around the level of 1.17 throughout the day as the Pound was too weak from Brexit concerns and fears that the UK economy would slow throughout 2016.

The Euro also strengthened. A weaker US Dollar (USD) as well as the week’s optimistic Eurozone datasets improved the shared currency’s performance towards the end of the week.

Germany’s construction PMI as well as the Eurozone’s retail PMIs improved from November to December and November’s Eurozone producer price results also beat expectations.

(Previously updated 12:45 GMT 05/01/2017)

Despite the day’s UK services PMI from Markit impressing investors, the Pound Euro 2017 exchange rate trended with a downside bias on Thursday morning.

GBP EUR spent most of the day trending around the level of 1.17 after hitting a weekly low of 1.16 before the publication of December’s services index report.

Markit’s print saw the UK services sector improve from 55.2 to 56.2 despite being predicted to slip to 54.7. The overall composite PMI also improved to a strong 56.7. As a result of these results, GBP EUR was able to hold above its weekly lows but continued to trend below the week’s opening levels.

(Previously updated 16:29 GMT 04/01/2017)

Pound Euro 2017 Exchange Rate Edges Back Towards Opening Levels on Wednesday

Despite a strong UK construction PMI from Markit, the Pound Euro 2017 exchange rate slipped back towards the week’s opening levels on Wednesday afternoon. GBP EUR failed to hit the level of 1.18 again after falling from that level on Tuesday afternoon.

The UK’s December construction results came in at a solid 54.2, improving from 52.8 despite being expected to slip to 52.6. Consumer credit was up in November, from 1.6b to 1.9b.

Demand for the Euro improved slightly in the afternoon due to the Eurozone’s better-than-expected December Consumer Price Index (CPI) projections, which came in at 1.1% year-on-year. A weaker US Dollar also allowed the Euro to strengthen.

(Previously updated 12:40 GMT 04/01/2017)

The Pound Euro 2017 exchange rate failed to hold its highs on Wednesday and instead fluctuated just above the week’s opening levels.

Tuesday’s Brexit news eventually weakened GBP EUR leaving it below 1.18 by Wednesday morning. Wednesday’s data failed to give the exchange rate the boost it needed to surpass that level.

However, demand for the Euro has also been relatively weak. The Pound continues to edge higher from 1.17 on Wednesday despite Wednesday’s Eurozone composite PMI figures beating preliminary results of 53.9 and coming in at 54.4.

(Published 07:00 GMT 04/01/2017)

The Pound Euro 2017 exchange rate surged on Tuesday, hitting the level of 1.18 for the first time since the 22nd of December 2016.

GBP EUR was boosted by the day’s impressive UK manufacturing PMI results, while the Euro was held back by long-term concerns of the potential rise of nationalist politics in the Eurozone bloc.

Pound (GBP) Bolstered by Hopes of Strong UK Economic Activity

The Pound slipped towards the end of 2016 trade for a number of reasons. First, 2017 means the Brexit process is about to begin and, second, investors have grown increasingly concerned that Britain’s post-referendum economic boost was coming to an end.

However, those concerns of Britain’s economic activity slowing and worsening may have been delayed somewhat this week, as Tuesday’s UK manufacturing PMI from Markit came in well above expectations.

The figure was expected to slip from 53.3 to 53, but instead printed at an impressively high 56.1. November’s figure was also revised higher to 53.6.

Hopes that Britain’s economic performance would remain strong for a while longer bolstered GBP on Tuesday morning.

However, later in the day it was held back by a bearish forecast from ING bank economist James Knightley, who stated that despite strong manufacturing stats the weakness in the Pound was likely to hit Britain’s consumer sector negatively in the coming months and cause UK ‘GDP growth to slow to a little above 1% in 2017 from 2.2% in 2016.’

Sterling was also held back from its best levels by news that UK ambassador to the EU Sir Ivan Rogers had stepped down from his position early.

One of Britain’s most experienced EU diplomats, Rogers’ resignation has been seen by some analysts as a major blow to the likelihood of a good post-Brexit deal with the EU.

Euro (EUR) Falls as Long-Term Political Concerns Continue to Weigh

Demand for the Euro has been poor this week. Investors remain bearish on the shared currency due to the 2017 economic and political outlook for the Eurozone bloc, which many analysts expect will either see no real change or worsen.

With a presumably bearish year ahead of it, the Euro has also shed value due to its negative correlation with the increasingly strong US Dollar.

This is despite this week’s Eurozone ecostats coming in sturdily. Despite markets being closed, Monday saw the publication of the Eurozone’s final December manufacturing PMIs which met projections and printed 54.9.

Tuesday’s German data was even more impressive. Germany’s unemployment rate remained at 6.0% and unemployment fell by -17k, a much better result than the expected -5k fall.

Germany’s preliminary December Consumer Price Index (CPI) results also beat expectations, improving from 0.8% to 1.7% year-on-year and from 0.1% to 0.7% month-on-month.

None of these stats benefitted the Euro considerably however.

Pound Euro 2017 Exchange Rate Forecast to Continue Advance if Other UK PMIs Impress

GBP EUR’s upward momentum was limited on Tuesday afternoon by concerns that other vital economic sectors of Britain would struggle even if manufacturing remains sturdy.

Therefore, Sterling’s strength is sure to improve if Markit’s other December UK PMIs also impress traders.

Wednesday will see the publication of Britain’s December construction PMI from Markit, which is predicted to slip from 52.8 to 52.6. Britain’s November consumer credit results will also be published.

Vital Eurozone stats will also be published on Wednesday, including Markit’s final December Eurozone PMIs in service and composite prints, as well as December inflation predictions. It’s likely that the strength of the US Dollar will be more influential to EUR trade this week however.

The week’s most important UK dataset will be Thursday’s services and composite PMI figures. If all UK PMI beat expectations, GBP may extend its gains towards the end of the week.

However, Brexit concerns remain a big influence on Sterling trade. If the UK government fails to replace Sir Ivan Rogers as the UK-EU ambassador in the near future, fears about Britain getting a bad Brexit deal are sure to worsen.

The Pound Euro 2017 exchange rate is likely to improve as the week goes on due to a strong US Dollar and hopes for strong UK economic activity, but this could reverse if Brexit jitters worsen.