GBP-EUR rate hits 2 week high

The last few days has seen some much needed improvements in the GBP-EUR rate, largely due to a slight weakening in the Euro as traders take their first real profits since its upward surge began back in April. Since the same time last week, the pound has gained nearly 2 cents against the Euro which is the biggest gain we have seen against the single currency during the last 2 months. Sterling gained some extra support from the latest Services PMI figures released yesterday morning which showed another month of growth in this sector. The actual growth figure was however again lower than expected and still represented a slower pace of growth at 53.2 compared to July’s figure of 53.8.

The other main data announcement yesterday was from the Euro-zone with their latest Retail Sales figures. Again the data impressed, beating forecasts of 2.5% with an actual figure of 2.6%. This meant that with a lack of data it was the US Dollar that lost out yesterday, dropping against both the pound and the Euro.

How far will GBP-EUR rate recover?

It is worth noting that the current recovery is one caused by natural profit taking in the markets rather than any new news or figures that have changed the sentiment and forecasts. The GBP-EUR rate remains in negative trend and as such the current improvement should be seen as a buying opportunity rather than an indication of better things to come. For GBP-EUR rate to recover further they will need to break a number of significant resistance levels at 1.0940, 1.10 and then 1.1050. With the ECB meeting round the corner tomorrow lunch time, and host of concerning data releases for the UK next week, these better exchange rates may not be around for long for those of you who need to send money abroad.

The day ahead is a very quiet one for the majors, with just Services and Manufacturing PMI for the US this afternoon at 1:45pm, followed by the Bank of Canada Interest rate decision at 2pm.