The Pound has climbed to its highest level in three-and-a-half months against the Euro data showed that activity in the UK’s services sector soared to its highest level in over six years in August suggesting that the UK’s economic recovery is on track to outpace that of the Eurozone.
According to Markit the UK’s services purchasing managers index climbed to 60.5 in August, the highest level recorded since December 2006 and ahead of the 60.2 recorded in July. Economists had been forecasting for a decline to 59.0. New businesses grew for an eight consecutive month and the latest figures are the biggest improvement in more than 16 years.
The better-than-expected data has bolstered expectations that the Bank of England will now have to raise interest rates sooner than it had expected as the pace of improvement continues to exceed forecasts.
The Euro meanwhile remains under pressure due to expectations that the European Central Bank will reiterate its pledge to keep rates on hold following today’s policy meeting, despite the improving picture for the single currency region’s economy.
Earlier on Wednesday, data showed that the final reading of Germany’s services PMI came in at 52.8 in August, up from a preliminary reading of 52.4. The Euro zone’s services PMI however dipped to 50.7, from an initial estimate for 51.0.
Weighing upon Euro sentiment is the speculation that Greece will need a third bailout as the nation’s chronic financial problems continue to prove problematic.
“It’s clear that despite recent progress, Greece’s trouble will not have been completely resolved by 2014,” Jeroen Dijsselbloem told lawmakers in the European Parliament.
He added “it’s realistic to assume that additional support will be needed beyond the program,” provided Greece complies with conditions set out by the Eurozone finance ministers, collectively known as the Euro group. He says a decision won’t be made before April of next year.
Euro (EUR) Exchange Rates
As of 10:40am
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3182
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8448
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4432
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6761
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3845