The economic data released so far this week has been positive for the Pound, as it’s shown that the UK economy is remaining resilient which has pushed the Pound to Euro rate north of 1.13 after trading in the 1.12’s earlier in the week.
The data releases cover Purchasing Managers Index (PMI) figures, which are forward looking indicators and offer an insight into the health of sectors within the economy.
So far Construction and Manufacturing PMI’s have beat expectations, boosting the Pound’s value. This morning is perhaps the most important of the three scheduled releases as it covers the services sector which is the UK’s most important. This sector covers almost 80% of the UK economy so a positive reading is likely to result in a boost to the Pound’s value and perhaps push GBP/EUR closer to 1.14.
The currency markets may be a bit quieter today as it’s a bank holiday in the US, but I wouldn’t rule out further moves for the Pound to Euro rate owing to this morning’s news release and also the meeting on Friday at Theresa May’s Chequers country residence.
Rumours are that May will put forward plans for the softest Brexit possible when she releases details of her Brexit White Paper shortly after her Chequers meeting. It guess it will depend on how markets receive the news as a softer Brexit is generally preferred within the financial markets but her plans, if true, could upset many of the hard line Brexiteers that have made their thoughts clear.
There is pressure on May and this month could be key for both her position as well as for the UK economy moving forward in this crucial time.
If you would like to be kept updated regarding any short term price changes between the Pound and Euro, do feel free to register your interest with me, you can get in touch using firstname.lastname@example.org. Data out of the UK will be quieter after today for the rest of the week but I do expect politics to play a role, especially on Friday.