Pound euro exchange rate: GBP holds as UK construction activity beats expectations

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The beat euro exchange rate is currently worth around €1.14

Pound investors greeted a stable, if unimpressive, private sector report this morning, with Markit’s UK construction function PMI printing steady at 52.5.

This is consistent with the previous period but unaffected by the market forecast of 52.0.

This result was largely due to combined factors of Stock Exchange uncertainty and soft economic growth, with the ensuing limitation that both procure upon investment.

Tim Moore, Senior Economist at IHS Markit shared his hopes on the results.

He said: “With a decline in new orders for a fourth time in five months, it was shopper hesitation and consumer diffidence towards spending that had construction energy stuttering.”

In other news, Britain’s manufacturing sector has lost some 600,000 share outs over the past decade according to a study by the GMB union.

The manufacturing torso EEF reported that business investment has fallen to its lowest level in a year – with the slant for UK manufacturers “slightly more subdued that it has been for some time.”

The bundle did concede, however, that manufacturers are still seeing a “positive illustrate” for the second half of the year – an outlook that perhaps stabilised First-class as the morning progressed.

It was client hesitation and consumer diffidence towards pay out that had construction activity stuttering

Tim Moore, senior economist at IHS Markit

Figures for the Eurozone was not much better this morning, with industrial manufacturer prices in the Euro area flatlining at 0.0 per cent month-on-month in April.

This is down from the Stride rise of 0.1 per cent and the market forecast of 0.3 per cent.

Nonetheless, the euro go oned to find support after political tensions in Italy eased final Friday, with Guiseppe Conte, 53, now accepted as Prime See to and the threat of a return to the polls dismissed.

Looking ahead, tomorrow’s UK overhauls PMI for May will provide a solid insight into the strength of the UK’s economy in Q2 2018 – with the posts sector making up nearly 80 per cent of GDP.

Investors currently expect the culminate to climb from 52.8 to 53.0, and if this occurs then we could see GBP/EUR rip off a strong comeback.

Beyond this, traders will be looking to assess a communication from European Central Bank (ECB) President Mario Draghi in Frankfurt, specifically after the disappointing Eurozone unemployment rate print for April, which advanced at 8.5 per cent.

If he does discuss monetary policy, analysts intent try to assess whether it indicates a willingness to abandon the bank’s bond-buying stratagem after September, or extend it into 2019.

Once again, dovish, or overly-cautious attitude could give GBP/EUR a small boost, whilst hawkish optimism could carry on with to keep it under pressure.

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