EUR/GBP continues to fall after weaker than expected PMI data from both economies. The UK manufacturing PMI fell to 51.5 in September from 52.5 in August, below market expectations of 52.3. The HCOB Eurozone Composite PMI fell to 48.9 in September from 51.0 in August, the lowest level in eight months.
EUR/GBP continues to rise for a fourth straight day after weaker than expected Eurozone and United Kingdom (UK) Purchasing Managers’ Index (PMI) data. EUR/GBP is trading around 0.8360 during European trading hours on Monday.
The provisional S&P Global/CIPS UK manufacturing Purchasing Managers’ Index (PMI) fell to 51.5 in September from 52.5 in August, below market expectations of 52.3. Similarly, the Services PMI fell to 52.8 in September from 53.7 in August, also below market expectations of 53.5.
“The slight slowdown in manufacturing and services output growth in September is not a cause for too much concern,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
In the Eurozone, the HCOB Composite PMI fell to 48.9 in September, down from 51.0 in August and well below the 50.6 forecast, the lowest in eight months. The Services PMI fell sharply to 50.5 from 52.9 in August, well below the market forecast of 52.4 and the lowest in seven months. Meanwhile, the Manufacturing PMI fell further, falling to 44.8 in September from 45.8 in August, below the 45.6 forecast and the lowest in nine months.
European Central Bank (ECB) President Christine Lagarde said on Friday that monetary policy needs to remain adaptable in an ever-changing world. According to Euronews, the core objectives of monetary policy remain the same, particularly price stability, but central banks must remain flexible to meet the challenges of a rapidly changing global economy.
Economic indicators
S&P Global/CIPS Manufacturing PMI
The Manufacturing Purchasing Managers’ Index (PMI), published monthly by both the UK Procurement and Supply Association and S&P Global, is a leading indicator of business activity in the UK manufacturing sector. The data is derived from a survey of senior managers of private sector companies. Survey responses reflect the change (if any) from the current month compared to the previous month and can predict trends in official data series such as Gross Domestic Product (GDP), industrial production, employment, and inflation. The index ranges from 0 to 100, with a level of 50.0 indicating no change from the previous month. A reading above 50 indicates a broad expansion in the manufacturing economy and is a bullish sign for the British pound (GBP). Meanwhile, a reading below 50 indicates a broad decline in activity among goods producers and is considered bearish for the British pound.
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Final release: Monday, September 23, 2024 08:30 (Prel)
Frequency: Monthly
Actual: 51.5
Consensus: 52.3
Previous: 52.5
Source: S&P Global
