- EUR/GBP came under downward pressure following mixed UK PMI data released on Tuesday.
- The vice president of the ECB, Luis de Guindos, declared that the central bank plans to lower interest rates in June.
- The UK services PMI improved to 54.9 in April, compared to 53.0 and 53.1 previously expected.
The EUR/GBP pair retreated and traded lower around 0.8620 in European time. Following mixed figures from the United Kingdom (UK) and Eurozone Purchasing Managers' Index (PMI), the currency cross lost ground. The UK's preliminary S&P Global/CIPS Manufacturing PMI fell to 48.7 versus expectations of holding steady at a reading of 50.3 in April. While the services PMI rose to 54.9 versus the expected reading of 53.0 and 53.1 previously. The composite PMI rose to 54.0 from the previous reading of 52.8.
In April, the Eurozone preliminary manufacturing PMI fell to 45.6, disappointing against the expected improvement to 46.5 from the previous 46.1. However, the services PMI showed strength, reaching 52.9 versus the estimated 51.8 and the previous 51.5. The April Composite PMI returned a better reading of 51.4, beating both the previous 50.3 and the expected 50.8.
Following the release of mixed German PMI data, the Euro gained ground. The preliminary German manufacturing PMI for April rose to 42.2, slightly below the expected 42.8, but above March's 41.9, marking a two-month high. The services PMI also saw a notable improvement and stood at 53.3, beating the market forecast of 50.6 and reaching a new ten-month high. The April composite production index stood at 50.5, exceeding both the forecast of 48.6 and March's 47.7, also reaching a ten-month high.
According to Reuters, the Vice President of the European Central Bank (ECB), Luis de Guindos, stated in a journalistic interview that the ECB plans to lower interest rates in June. However, he stressed the need for caution regarding future actions and the importance of taking into account signals from the US Federal Reserve (Fed).
On the United Kingdom (UK) side, interest rate futures are fully pricing in a quarter-point rate cut by the Bank of England in August, with expectations of two rate cuts by the end of the year. This growing speculation about rate cuts by the BoE is putting downward pressure on the British Pound (GBP).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
