Pound Stalls at 1.16598 Euros Ahead of Key PMI Data
Sterling holds steady near 1.166 as traders await UK and Eurozone activity data to determine the next directional move.
Key points
- GBP/EUR trades at 1.16598, unchanged on the week after volatile moves around the BoE decision.
- UK headline inflation rose to 3.1% in August, while retail sales beat expectations with a 0.5% gain.
- Upcoming UK and Eurozone PMI data on Wednesday will be the primary driver for the next price move.
The GBP/EUR pair sits at 1.16598, effectively flat for the week. This stability follows a volatile stretch where the Bank of England’s rate decision caused sharp swings in Sterling.
Exchange Rates UK notes that upcoming Purchasing Managers' Indices will likely dictate direction. Stronger services data could support whichever currency delivers better results.
Recent Data Mixed For Sterling
UK unemployment held steady, defying expectations of a rise. However, headline inflation rose to 3.1% in August, matching forecasts but offering no new tailwind for the Pound.
The Bank of England kept interest rates unchanged last week. This decision limited Sterling’s gains, though slowing bond sales helped lower UK borrowing costs and contained losses.
Eurozone Faces Persistent Headwinds
The Euro struggled against a strengthening US Dollar this week. Germany’s ZEW sentiment index improved to its highest level since February but still missed market forecasts.
Eurozone industrial production fell 0.1% in July, a smaller drop than expected. ECB President Lagarde also indicated the bank would continue setting rates on a meeting-by-meeting basis.
Fiscal Data And PMIs Key
UK borrowing figures release Tuesday could pressure the Pound if they show a sharp rise. Traders will watch for signs of fiscal strain ahead of the upcoming Autumn Budget.
Preliminary September PMIs for both the UK and Eurozone arrive Wednesday. Solid services sector activity is needed to provide support for either currency in this range.
