- EUR/GBP received downward pressure after the mixed UK PMI data released on Tuesday.
- ECB Vice President Luis de Guindos stated that the central bank plans to lower interest rates in June.
- UK Services PMI improved to 54.9 in April, against the expected 53.0 and 53.1 prior.
The EUR/GBP cross pared its daily gains, trading lower around 0.8620 in European hours on Tuesday. After mixed Purchasing Managers Index (PMI) figures from the United Kingdom (UK) and the Eurozone, the currency cross lost ground. The preliminary S&P Global/CIPS UK Manufacturing PMI declined to 48.7 against the expectations of remaining constant at the reading of 50.3 in April. While Services PMI increased to 54.9 against the expected reading of 53.0 and 53.1 prior. Composite PMI increased to 54.0 from the previous reading of 52.8.
In April, the preliminary Eurozone Manufacturing PMI fell to 45.6, disappointing against the anticipated improvement to 46.5 from the previous 46.1. However, the Services PMI showed strength, reaching 52.9 compared to the estimated 51.8 and the prior 51.5. The Composite PMI for April exhibited an improved reading of 51.4, surpassing both the previous 50.3 and the expected 50.8.
Following the release of mixed German PMI data, the Euro gained ground. April's preliminary German Manufacturing PMI climbed to 42.2, slightly below the expected 42.8 but up from March's 41.9, marking a two-month high. Services PMI also saw a notable improvement, reaching 53.3, surpassing the market's expectation of 50.6 and hitting a fresh ten-month high. The Composite Output Index for April stood at 50.5, exceeding both the expected 48.6 and March's 47.7, also reaching a ten-month high.
According to Reuters, European Central Bank (ECB) Vice President Luis de Guindos stated in a newspaper interview that the ECB plans to lower interest rates in June. However, he stressed the necessity of prudence regarding future actions and the importance of considering signals from the US Federal Reserve (Fed).
On the United Kingdom’s (UK) side, interest rate futures indicate full pricing for 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 increasing speculation about rate cuts by the BoE is putting downward pressure on the Pound Sterling (GBP).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.