- The EUR/GBP made a late-week break for the 0.87 handle.
- The Pound Sterling continues to give up ground after a dovish BoE shrank from rate hikes,
- EU PMI figures came in mixed, keeping Euro gains restrained.
The EUR/GBP stretched for the 0.8700 major handle in Friday trading, closing the week with over a full percent of upside gains with the Euro (EUR) seeing its best trading week against the Pound Sterling (GBP) since early February.
BoE balks on rate hike, EU Manufacturing PMI misses the mark
The Bank of England (BoE) pulled back from a broadly-anticipated rate hike this Thursday after inflation figures for the UK economy came in broadly lower than expected. The UK central bank is seeing inflation fall away faster than previously expected, and the BoE is set to see a "none and done" end to the rate hike cycle.
Eurozone Purchasing Manager Index (PMI) figures came in mixed early Friday, with the headline Composite PMI for September printing at 47.1, reversing the forecast decline 46.5 and climbing further from the previous period's 46.7.
The underlying components were less positive, leaving the Euro with limited upside following the release.
The EU Services PMI printed at 48.4, well above the forecast 47.7 and improving from the previous 47.9.
The Manufacturing component flubbed market forecasts, printing a disappointing 43.4, ticking down from the previous 43.5 and entire missing the market's expected improvement to 44.0.
Read more:
BoE holds interest rate steady at 5.25% in split vote
Eurozone Preliminary Manufacturing PMI unexpectedly falls to 43.4 in September vs. 44.0 expected
Next week is particularly anemic for both the Euro and the Pound Sterling, though next Friday will be seeing Gross Domestic Product (GDP) figures for the UK, to be closely followed by Consumer Index Price (CPI) numbers for the Eurozone.
EUR/GBP technical outlook
The EUR/GBP managed to etch in another gainer week, coming within sight of the 200-day Simple Moving Average (SMA) currently treading water near 0.8720.
The pair has accelerated cleanly through the descending trendline from July's swing high into the 0.8700 handle, and continued buying pressure will see the pair mount the psychological level and stage further gains.
On the downside, immediate technical support is coming from the 100-day SMA, currently turning bullish from 0.8600, and the bottom of recent consolidation is sitting further below near 0.8520.
EUR/GBP daily chart
EUR/GBP technical levels
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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