Pound to euro exchange rate: Sterling enjoys ‘mini rally’ as it bounces back.
THE POUND benefited from a “mini rally” and bounced back yesterday thanks to a positive UK services PMI, experts say.
The pound to euro exchange rate improved yesterday, with the pound bouncing back thanks to a better-than-forecast UK services PMI.
However, the exchange rate could be impacted today by the Eurozone’s retail and construction PMIs.
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Sterling’s mini rally was triggered by a better-than-forecast UK services PMI.
“As the services sector accounts for over 70 per cent of total growth, the news that output was at its highest level for seven months supported hopes for an August rate hike from the Bank of England (BoE) and sent Sterling higher.
“The Eurozone’s retail and construction PMIs could impact GBP/EUR today, as could a speech from BoE Governor Mark Carney.”
The better-than-expected UK services PMI reading for June beat forecasts for stagnation, with the reading rising from 54 points to 55.1.
This is the strongest rise since October 2017 and has been received positively by analysts at IHS Markit, the company that compiles UK PMI readings.
Beyond this Eurozone PMI data, pound movement may next be driven by a speech from BoE Governor Mark Carney later this morning.
Mr Carney will be speaking during a visit to the North East and it is thought he could hint at an August interest rate hike, which would boost pound Sterling demand if he did so.