GBP to Euro Exchange Rate Ticks Up following UK and Eurozone PMI Data

December 17, 2024 - Written by David Woodsmith

STORY LINK GBP to Euro Exchange Rate Ticks Up following UK and Eurozone PMI Data

The Pound vs Euro exchange rate (GBP/EUR) drifted higher on Monday following the publication of both the UK’s and the Eurozone’s preliminary PMI data for December.

On Monday, the Pound (GBP) strengthened against most of its peers after the release of the UK's preliminary PMI data for December.

The report showed that the UK's manufacturing index continued to decline, falling from 48.0 to 47.3, contrary to the expected increase to 48.2.

However, the UK's vital services index exceeded market forecasts in December, rising from 50.8 to 51.4, surpassing the modest prediction of 51.0.

This better-than-expected performance in the services sector provided a boost to GBP exchange rates following the data release.

At the start of the week, the Euro (EUR) maintained its position against most of its counterparts as the Eurozone also released its preliminary PMI data for December.

Like the Pound, the Eurozone's manufacturing index remained unchanged at 45.2, failing to meet the anticipated rise to 45.3 and staying firmly in contraction territory (a reading below 50).

However, the Eurozone's services index also exceeded market expectations.

The index climbed from 49.5 to 51.4, re-entering expansion territory, and provided the common currency with some modest support during Monday's European session.

GBP/EUR Exchange Rate Forecast: UK and Eurozone Data in Focus

Looking ahead to Tuesday, the main factor influencing the Pound Euro exchange rate will likely be the release of several economic reports from both the UK and the Eurozone.

Germany, the Eurozone's largest economy, will unveil its latest Ifo business climate index and the crucial Zew economic sentiment index.

Additionally, the Eurozone will release its most recent balance of trade data.

Given the number of economic releases scheduled for Tuesday, EUR exchange rates are expected to experience volatility and trade within a wider range.

In the UK, the latest unemployment rate is forecast to remain at 4.3%, while average earnings (excluding bonuses) are expected to rise from 4.8% to 5%.

This mixed economic data could affect GBP exchange rates on Tuesday, particularly if there is an increase in uncertainty regarding the UK's labour market.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Euro Forecasts