Sterling begun the week in a subdued fashion and traded within a very thin range throughout yesterday’s trading session.
There was little economic data released pertaining to the UK economy outside of housing data, which showed that property prices rose by just £14 between January and February which is the smallest increase reported by Rightmove since the property website begun recording property prices.
Throughout the day GBP/EUR barely broke a trading range of 25 pips, and this morning this trend of thin ranges has continued although there are some releases later this morning which could potentially impact GBP/EUR rates.
UK Services and Manufacturing PMI data will be released at 9.30am this morning and both are expected to show further contractions in the sectors. A figure below 50 demonstrates a contraction within the sector, and the expectation this morning is for Manufacturing to show 46.8 and for Services to show a figure of 48.3. These sectors collectively cover close to 90% of the UK economy so markets are likely to follow these readings closely.
The trend since the start of 2023 has generally been a declining Pound when we compare it to other major currency pairs such as the US Dollar and the Euro.
In December GBP/EUR was trading close to 1.1700 and now the pair are just over 1.1250, and trading within thin ranges as mentioned earlier within this blog.
The US economy is stronger than many had expected it to be and the European Central Bank (ECB) begun hiking interest rates at a later date than the Bank of England (BoE) and this has put pressure on the Pound against both currencies.
How the UK economy performs, and the approach by the BoE is likely to drive GBP values moving forwards. If you wish to be updated regarding GBP exchange rate changes do feel free to register your interest with me.
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