Pound Sterling to Euro (GBP/EUR) Exchange Rate Above 1.38, BoE Announcement Ahead
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending above 1.38 prior to the Bank of England (BoE) and European Central Bank (ECB) interest rate announcements.
Sterling softened on Wednesday as a result of a slightly soft UK Services PMI but was able to recoup losses on Thursday as German Factory Orders numbers provided cause for concern.
While the outcomes of both today’s central bank decisions are unlikely to have much of an impact on trading, some GBP/EUR fluctuations could occur as a result of ECB President Mario Draghi’s accompanying comments.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading in the region of 1.3802
GBP/EUR Exchange Rate Edges Higher after Construction Data
The Pound was modestly boosted against the Euro on Tuesday as the Markit/CIPS Construction PMI showed the sharpest rate of construction activity growth for four months.
The gauge, which had been predicted to dip to 59.0, actually advanced to 60.1 in February.
Markit economist Tim Moore noted; ‘The latest survey highlights renewed vitality within the UK construction sector, as output growth picked up further from the soft patch seen at the end of 2014. Housing, commercial and civil engineering activity all expanded at the quickest rates since last October, helped by sharp rises in new business volumes and an improving economic backdrop.’
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3748 but later pared these gains to fall back to 1.3719 before the close of the local session.
The Pound Sterling to Euro (GBP/EUR) exchange rate could recoup some of yesterday’s losses if today’s UK Construction PMI shows an unexpected improvement.
GBP/EUR Exchange Rate News: German Retail Sales Beat Forecasts
The Pound Sterling to Euro (GBP/EUR) exchange rate began the week trading close to 1.38.
However, the pairing steadily declined over the course of Monday’s European session despite UK data printing above expectations.
Concerns regarding the close run nature of the UK’s upcoming general election saw Sterling edge lower against the majority of its currency counterparts.
The Pound Sterling to Euro (GBP/EUR) exchange rate achieved a high of 1.3743
The Pound’s downtrend was aided by below-forecast UK house price and mortgage approval data, and the British currency failed to recoup losses even after the UK’s Manufacturing PMI printed at 54.1, smashing predictions for a reading of 53.1.
Meanwhile, the Euro was supported as both the Eurozone’s Consumer Price Index and unemployment reports delivered positive surprises.
The level of joblessness in the currency bloc declined to 11.2% from an upwardly revised 11.3% while annual inflation improved from -0.6% to -0.3%.
On Tuesday morning the Euro registered additional gains against the Pound as German retail sales were shown to have surged by 2.9% on the month in January rather than the 0.4% expected.
This brought the annual figure up to 5.3%.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: UK Services PMI Ahead
Later today the Pound may claw back some of its recent declines if the UK’s Construction PMI impresses.
As it stands, the measure is believed to have slid from 59.1 to 59.0 in February – still well above the 50 mark separating growth from contraction.
The Pound Sterling to Euro (GBP/EUR) exchange rate fell to a low of 1.3720
Although the UK construction sector accounts for a relatively small proportion of total economic growth, an unexpected gain could still be Pound supportive.
Today’s Producer Price Index for the Eurozone may also have an impact on GBP/EUR trading.
Investors will also be looking ahead to tomorrow and the publication of the UK’s Services PMI.
As the services sector contributes over 70% to GDP, an improvement in that measure is usually well received.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trading in the region of 0.7278. The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5365. The US Dollar to Pound Sterling (USD/GBP) exchange rate is trading in the region of 0.6506. The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3737