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GBP/EUR rose on Monday after strong data from the UK's services sector.
The pound received a welcome boost courtesy of its dominant professional services sector on Monday. UK private sector growth reached a six-month high, with the all-important services sector recording a score of 53.2 in March’s S&P Global UK purchasing managers’ index (PMI) study – the best result since last summer.
GBP/EUR was still only slightly improved over the course of Monday. GBP/USD was little changed and the euro’s losses against the US dollar were contained to less than half a cent. The pound now faces a nervous wait to see how markets react to tomorrow’s inflation report and spring statement.
The eurozone had its own PMI result to shout about. In the Hamburg Commercial Bank (HCOB) report, German manufacturing PMI came in above forecasts at 48.3 in March. That was in stark contrast to the UK’s manufacturing industry, which contracted by more than expected even as other sectors thrived.
It might not feel like it, but house price affordability returned to pre-pandemic levels last year, according to the Office for National Statistics (ONS). In 2024, the median house price was 7.7x the average annual wage as affordability improved in 289 of the 318 local authorities in England and Wales.
New Canadian prime minister Mark Carney has called a snap election for 28 April, labelling Donald Trump’s recent actions “the most significant crisis of our lifetime”. The Canadian dollar recorded daily advances over the pound and the US dollar, but has still fallen by almost 5% against the latter since October.
Speaking of Mr Trump, the US president has said he will impose a 25% tariff on all countries that import oil from Venezuela. Aside from potentially ruining that economy, the move could serve as a proxy for direct tariffs on India and China – big importers of Venezuelan oil.
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GBP: Pound starts well after PMI result
Things could get messy later this week, but by all accounts the pound made a reasonable start on Monday. With the help of some outstanding PMI data (although not from factories, it must be said) sterling was able to forge ahead against the euro. Now comes the real test.
GBP/USD: the past year
EUR: Settling in
Although the euro lost some ground to begin the week, the worst of the volatility that marked the start of the year has now cooled. The euro has made steady progress since last month and more consumer data from Germany later in the week could help cement its comeback.
GBP/EUR: the past year
USD: The PMI king
America made it a clean sweep of our three key jurisdictions reporting PMI data yesterday. Although this data tends to be less impactful, on this occasions it served to boost the US dollar by virtue of comparison. America’s composite (i.e. manufacturing and services data combined) scored above that of the UK and eurozone.
EUR/USD: the past year
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