EUR/GBP rises 0.20% on data releases

on Apr 1, 2014
Updated: Oct 21, 2019
Listen Tuesday, April 1st:_ The EUR/GBP has risen today amid a plethora of manufacturing and unemployment data releases from both the Eurozone and the UK.

The pair is currently trading at 0.8284, up 0.20 percent.
The Markit eurozone Manufacturing Purchasing Managers Index (PMI) final reading showed no change from the flash estimate of 53 points in March, but the index was below February’s 53.2 points. Above 50 denotes industry expansion.
“The recovery in the Eurozone manufacturing sector extended into its ninth consecutive month in March, rounding off a positive start to 2014,” Markit’s report says, adding that although the Index fell to a three-month low “the average reading over the first quarter as a whole at 53.4 was the best outcome since the second quarter of 2011”.

The Markit/BME Germany Manufacturing PMI fell to a four-month low, at 53.7 last month from 54.8 points in February as new export orders rose at the slowest pace since October 2013.
“Germany’s goods producing sector lost some of its recently strong growth momentum in March,” says Markit economist Oliver Kolodseike. “Output and new business orders rose at sharp, albeit weaker rates, adding evidence that the manufacturing upturn has moderated slightly.”

The unemployment rate in the Eurozone was 11.9 percent in February, Eurostat reported today. The January rate of 12 percent was revised down to 11.9.
Meanwhile, in Germany unemployment fell by 12,000 in March to 2.9 million, marking its fourth consecutive decrease. However, the seasonally adjusted unemployment rate remained unchanged at 6.7 percent.

“The underlying trend is a gradual decline in German unemployment over the course of the year,” says Berenberg Bank chief economist Holger Schmieding. “However, unemployment cannot fall much further because the people who are still unemployed do not have the skills needed to find jobs.”
The Markit/CIPS UK Manufacturing PMI decreased to 55.3 points last month from the prior 56.2, with export demand dropping to its lowest level in 10 months.

While UK manufacturing “may have lost some steam over the first quarter, this seems unlikely to herald the beginning of a renewed slowdown,” observes Paul Hollingsworth and Samuel Tombs, economists at Capital Economics, in a note. “A sharp fall in the export orders balance suggests that the strong pound may finally be starting to hurt exporters.”