Euro (EUR) Exchange Rate firms against British Pound, US Dollar
The Euro ticked higher against the British Pound and US Dollar on Thursday as data out of the Eurozone showed that the regions service sector grew at its fastest pace in almost three years.
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Germany led the way as usual and helped push a surge in service sector activity which countered a slowdown in the Eurozone’s manufacturing sector.
“Recovery prospects in Germany’s private sector continued to brighten in May, with the flash PMI signalling further solid increases in activity and new orders. Furthermore, we saw rising workloads feed through to meaningful employment gains, with the latest rate of job creation the highest since late-2011,” said Markit economist Oliver Kolodseike.
Markit’s manufacturing purchasing managers index fell to 52.5 in May, down from the 53.4 recorded in April and worse than the 53.2 reading forecast by economists.
The separate PMI data for the region’s services sector showed a rise to a 35-month high of 53.5 in May, better than the 53.1 seen in April and better than the slight fall to 53.0 expected by economists.
France remains a worry for the Eurozone economy as the regions second largest economy saw its private sector fall back into contraction. France’s services PMI fell to a three month low of 49.3, down from the previous month’s figure of 51.2 and below the 51 level expected by economists.
The British Pound softened against the Euro and other major peers after a report showed that public sector net borrowing surplus in the UK climbed more than forecast. Revised GDP growth meanwhile stayed at 0.8%.
Further gains for the Euro are likely to be restrained by continued expectations that the European Central Bank will introduce new monetary easing measures at next month’s policy meeting.
“We have to be a bit careful in drawing too-strong conclusions from this survey about the pace of the Eurozone recovery. With inflation low and a sustained Eurozone recovery not yet assured, further ECB easing in June looks all but certain,” said an economist from ING Groep NV based in Amsterdam.
The Euro is currently trading against the US Dollar in the region of 1.3683 and against the British Pound in the region of 0.8108.