EUR GBP Higher but PMI Data will Drive the Pair
The EUR GBP exchange rate was 0.14% higher on Monday but today’s flash November PMI for the Eurozone, Germany and the UK will decide the fate of the pair. The British pound paused after recent rate hike bets with top officials from the Bank of England adding some doubt to the potential for a December rate hike.
The EUR v GBP was trading at 0.8400 ahead of today’s economic data release.
PMI data will drive the EUR v GBP on Tuesday
Today will see the closely watched PMI data for the Eurozone, Germany and UK.
The data is usually an early indicator of GDP prospects, and the November numbers are expected to show a slight slowdown in the European and UK economies.
For Germany, manufacturing is the important number and a dip from 57.8 to 56.9 is expected. The UK economy is more reliant on the services sector and a drop from 59.1 to 58.5 is expected.
The 50 mark is the difference between expansion and slowdown so there is still positive activity.
Meanwhile, Bank of England officials are still casting some doubt on a December rate hike. Another voting member, Johnathan Haskel, has a speech today and traders will look for further clues.
Governor Andrew Bailey said on Monday:
“A, activity in the economy is slowing. B, the proximate cause of many of these inflation issues is on the supply side, and monetary policy isn’t going to solve these directly. It doesn’t get more gas, more computer chips, more lorry drivers”.
His comments suggest further hesitancy to act in the December meeting but that could only worsen the inflationary pressures in the weeks ahead.
Angry protests grip Europe as new virus restrictions imposed
Angry protests were seen breaking out across Europe as new restrictions were implemented.
Austria moved to a full lockdown on Monday with Germany set to impose restrictions on the unvaccinated population.
In Austria, around 50,000 people joined a protest against the country’s 4th coronavirus lockdown and a vaccine mandate that will happen in February.
The country’s Chancellor Alexander Schallenberg has stressed that the lockdown will end no later than December 13th but it is still unclear how the unvaccinated will be treated after that date. The growing unrest could be a problem for the European governments and the stuttering economic recovery.
There was further unrest over the weekend in the Netherlands and Belgium, where hundreds of anti-lockdown protesters took to the streets. Violence broke out in many Dutch cities for three consecutive days.
Germany’s health minister hinted at strict restrictions coming as he said bluntly on Monday that by the end of the winter, “just about everyone in Germany will have been vaccinated, cured or dead.”
Politicians will ignore the recent protests and push forward with their restrictions but that is only going to lead to more tensions in the coming months and could affect the price of the euro versus the pound sterling.
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The post EUR GBP Higher but PMI Data will Drive the Pair appeared first on Euro Rate Forecast.
Source: https://www.eurorateforecast.com/2021/11/eur-gbp-higher-but-pmi-data-will-drive-the-pair/
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