Despite UK service sector data hitting a seven-month low, the Pound exchange rate (GBP/EUR, GBP/USD) remained resilient as Brexit positivity boosted the British currency.
Brexit Keeps Pound Sterling Exchange Rate Climbing vs Euro and US Dollar
The Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Euro (GBP/EUR) currency pairs rose after reports from the weekend that Theresa May had managed to secure a deal which would keep the UK in the customs union after Brexit. The GBP/USD exchange rate has reached highs today of 1.3040 while GBP/EUR has hit a pinnacle of 1.1445.
However, Markit’s latest Services Purchasing Managers’ Index (PMI) did disappoint markets this morning when it fell from 53.9 in September to 52.2 in October. The decline saw the data hit a seven-month low as Brexit uncertainties weighed. The services sector makes up the majority of the UK economy, and therefore a decline in activity is never welcomed. The Markit Composite PMI also fell, tumbling from 54.1 to 52.1.
Economist Howard Archer commented:
‘Brexit uncertainties and concerns over the UK and global economies weighed on demand for business services. Additionally, demand for consumer services was reported to be subdued, which ties in with other signs that consumers reined in their spending at the start of the fourth quarter after splashing out over the summer.’
Meanwhile, the US recieved some good news; the latest ISM Non-Manufacturing/Services Composite index came in at 60.3 in October, a small decline from the previous month’s 61.6, and above the 59.0 forecast.
In the Eurozone there was some disappointing news when the Sentix Investor Confidence figure slipped, from 11.4 to 8.8, rather than settling at the 9.8 forecast. The figure recorded a two-year low, and is the third consecutive monthly decline.
Sentix Managing Director Manfred Huebner commented:
‘The reasons for this development are manifold. There are external factors such as the US President’s trade policies as well as European issues. The discussion about the future of the car industry in Germany, the weakness of the banking sector and the budget issue in Italy come to mind.’
Despite climbing against a host of currency majors, the Pound slipped against the Turkish Lira. The Lira tumbled against the US Dollar (TRY/USD) when it was revealed that annual inflation had jumped by 25.0% in October, it’s highest level in 15 years. However, later in the session it clawed back some gains.
Today’s Interbank Exchange Rates (GBP/EUR, GBP/USD, GBP/TRY, USD/TRY)
The Pound to Turkish Lira (GBP/TRY) exchange rate is trending at 6.9791, the US Dollar to Turkish Lira (USD/TRY) is trending at 5.3560.
The Pound to Euro (GBP/EUR) exchange rate is trading at 1.1427. The Pound to US Dollar (GBP/USD) currency pair is trading at 1.3028.