ExchangeRates.org.uk - On Monday, the Pound (GBP) gained ground against the Euro (EUR) and most of its counterparts following the release of the UK's preliminary PMI data for December.The report indicated that the UK's manufacturing index declined further into contraction territory, (a reading below 50), dropping from 48.0 to 47.3 instead of the anticipated rise to 48.2.
However, the UK's crucial services index surpassed market expectations in December, climbing from 50.8 to 51.4, which was higher than the modest forecast of 51.0.
This positive surprise helped bolster GBP exchange rates following the data release.
The Euro (EUR) managed to hold steady against the majority of its peers at the start of the week as the Eurozone also published its preliminary PMI data for December.
Similarly to the Pound, the Bloc’s latest manufacturing index stayed the same at 45.2 and failed to rise to 45.3, remaining firmly within the contraction zone (a reading below 50).
However, the Eurozone’s latest services index also came in above forecasts.
The index rose from a previous reading of 49.5 to 51.4, and managed to enter into expansion territory once again, offering the common currency some modest support during Monday’s European session.
GBP/EUR Forecast: UK and Eurozone Data to Drive Movement
Looking ahead, the primary driver of movement for the Pound Euro exchange rate looking at Tuesday will likely be the publication of several economic releases from both the UK and within the Bloc.
The Eurozone’s largest economy, Germany, will publish its latest Ifo business climate index alongside the all-important Zew economic sentiment index, while the Bloc will publish its latest balance of trade data.
With a slew of economic releases scheduled for release on Tuesday, EUR exchange rates are likely to fluctuate and trade in a wide range.
Looking at the UK, the country’s latest unemployment rate is projected to stay at 4.3%, while average earnings (excluding bonuses) are anticipated to increase from 4.8% to 5%.
This mixed economic data could impact GBP exchange rates on Tuesday should the data see a rise in uncertainty surrounding the UK's labour market.
This content was originally published on ExchangeRates.org.uk