April 23, 2021 - Written by John Cameron
STORY LINK GBP/EUR Forecast: Pound to Euro Exchange Rate Mixed as Euro Supported by US Dollar Weakness
The Pound Euro (GBP/EUR) exchange rate is mixed this morning despite a range of positive data from the UK as the Euro is bolstered the US Dollar’s weakness.
At the time of writing the GBP/EUR pairing are trading at around 1.1503 as the Pound is able to limit its losses with surging flash PMI’s.
Pound Sterling (GBP) Mixed Despite Positive Retail Sales
The Pound is mixed against the Euro this morning despite better-than-expected retail sales from the UK during March.
Retail sales soared 5.4% in March, beating analyst’s forecasts of just a 1.5% increase. Figures from the Office for National Statistics (ONS) also showed that compared with March last year, sales were up 1.6%.
Lisa Hooker, consumer markets leader at the consultancy PwC, commented on the growth saying;
‘Clothing sales, while still over 40% lower than pre-pandemic levels, continued their strong bounceback, with a 17.5% improvement compared with February, suggesting that consumers are cautiously looking forward to the end of lockdown with new outfits ready for newly permitted social events.’
Sterling has also found support from the flash PMI data for April from the UK which have seen UK businesses grown at their fastest pace in eight years.
The UK services business activity index jumped up to 60.1, as the private sector sees a strong revival as the UK reopens its economy.
Duncan Brock, Group Director at CIPS, commented on the flash PMI’s for April:
‘There were signs of hope in abundance in April for the UK economy as private sector businesses forged ahead confidently, lifted by strong rises in output, orders and jobs.’
’Service providers primarily enjoyed a bumper expansion of activity and the strongest since August 2014 as consumers also became more confident in their spending habits driven by vaccinations and safer premises.’
Euro (EUR) Supported by Flash PMI Data from the Eurozone
The Euro has found support today from the release of the latest flash PMI data from the Eurozone which has shown a sustained growth in the private sector.
In the Eurozone business activity picked up to the fastest growth rate since July 2020 due to a record expansion in manufacturing production and the first growth in the service sector since last August.
Chris Williamson, chief business economist at IHS Markit, commented on the growth, saying:
‘In a month during which virus containment measures were tightened in the face of further waves of infections, the Eurozone economy showed encouraging strength. Although the service sector continued to be hard hit by lockdown measures, it has returned to growth as companies adjust to life with the virus and prepare for better times ahead.’
A mixed market mood has also helped support the Euro today following President Joe Biden’s proposed tax hike which has caused the US Dollar to falter this morning.
GBP/EUR Exchange Rate Forecast: Eurozone Consumer Confidence in Focus
Over the weekend, the GBP/EUR pairing will continue to be driven by any coronavirus developments as investors keep an eye on the Indian mutation of the virus.
Heading into next week, for Euro traders, business climate and consumer confidence data from Germany and the Eurozone will drive movement in the currency.
An increase in consumer confidence for April will hope to move the Euro higher as the bloc ramps up its coronavirus vaccine rollout, however a surge in cases across Europe in March could cause the Euro to instead fall.
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