EUR/GBP rises toward 0.8550 due to improved Eurozone Manufacturing PMI
- EUR/GBP gains ground as Eurozone Manufacturing PMI improved to 47.4 in May, reaching a 15-month high.
- The British Pound maintains its position after the release of mixed UK PMI.
- BoE may delay rate cuts as UK CPI softened at a slower pace than expected in April.
EUR/GBP advances to near 0.8520 during the European session on Thursday, as the Euro appreciates following the improved Eurozone Preliminary Manufacturing Purchasing Managers Index (PMI). The Eurozone manufacturing sector's downturn improved to 47.4 in May from April's 45.7, surpassing the expected reading of 46.2 and reaching a 15-month high.
Additionally, the bloc’s Services PMI remained steady at 53.3 in May, just below the estimate of 53.5. Meanwhile, the Composite PMI increased to 52.3 from 51.7, marking a 12-month high.
In Germany, the manufacturing sector's contraction slowed in May, while the services sector outperformed. The Manufacturing PMI rose to 45.4, its highest level in four months. At the same time, the Services PMI increased to 53.9, hitting an 11-month peak.
In the United Kingdom (UK), mixed PMI data helped the Pound Sterling (GBP) to hold its ground. The seasonally adjusted S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) improved to 51.3 in May, up from 49.1 in April, surpassing expectations of 49.5. However, the Preliminary UK Services PMI fell to 52.9 in May, missing the market consensus of 54.7 and down from the previous figure of 55.0.
Chief Business Economist at S&P Global Market Intelligence, Chris Williamson said “The flash PMI survey data for May signaled a further expansion of UK business activity, suggesting the economy continues to recover from the mild recession seen late last year.”
Additionally, the British Pound receives support as the Bank of England (BoE) might delay its shift to policy normalization due to the UK Consumer Price Index (CPI) report for April showing that inflation softened at a slower pace than expected.
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