Last week’s high: €1.1580
Last week’s low: €1.1006
Pound Ends Week on a High Note as BoE and Brexit Give Boost
The Pound Euro exchange rate was on something of a roller coaster rise last week but ended up close to its opening levels.
Sterling saw some weakness early on in the week but was buoyed by some unexpectedly weak Eurozone GDP growth. Q3 figures came in at a rate of 0.2% – half of the expected 0.4% and sparking market fears of a gathering slowdown across the bloc.
At the same time the German Chancellor Angela Merkel announced that she would be stepping down at the end of her term following some disastrous regional election results.
The Pound then sank on some weaker-than-expected retail figures before bouncing back strongly on reports that Theresa May could have secured a deal for the UK financial services sector granting it access to European markets after Brexit.
This was swiftly followed by the Bank of England talking up the UK economy after the latest rate meeting (no change), hinting at the possibility of raising interest rates even in the event of a no-deal Brexit.
EUR Outlook: All Eyes on PMI Data
Looking ahead PMI data will be in focus today, with the high-impact UK services reading due out at 9:30.
Current forecasts are for a slight rise in the pace of sector activity, which could be all that’s needed to boost Sterling against the Euro.
Tomorrow will see the release of October’s Eurozone services and composite PMIs, with no change currently forecast.
09:30 UK Services PMI (Oct)
09:00 EU Markit Services and Composite PMI (Oct)
08:00 EU ECB meeting – non-monetary policy (Sep)
09:00 EU Economic Bulletin
09:30 UK GDP Estimate (Q3)
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