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EUR/GBP gave up the previous day’s gains and was trading around 0.8320 during the European session on Thursday. EUR/GBP remains tepid following the release of HCOB Purchasing Managers Index (PMI) data from the Eurozone and Germany.
The euro zone’s HCOB PMI composite index rose as expected to 49.7 in October, slightly above September’s 49.6 and hitting a two-month high. In contrast, the services PMI fell to 51.2 in October, down from 51.4 in September and expectations of 51.6, and the lowest level in eight months. Meanwhile, the manufacturing PMI rose to 45.9 from 45.0 previously, beating expectations of 45.1 and hitting a five-month high.
In addition, the preliminary value of the German Composite Output Index (HCOB) rose to 48.4 in October from 47.5 in September, hitting the highest level in two months. The manufacturing PMI climbed to 42.6, up from 40.6 in September and above expectations of 40.5. At the same time, the services purchasing managers index rebounded to 51.4 from the previous 50.6, exceeding market expectations of 50.5 and hitting a three-month high.
Bank of England Governor Andrew Bailey said during a discussion at the Institute of International Finance’s annual membership meeting in Washington, D.C., on Wednesday that inflation is currently below target due to annual base effects. Bailey noted that high savings rates indicated consumer caution, adding that pension funds should not be required to make mandatory allocations to UK assets.
The pound’s gains came ahead of UK (UK) Purchasing Managers’ Index data due to be released later in the day. Traders will also look to comments from Bank of England Monetary Policy Committee member Catherine Mann during a panel discussion during the Reinventing Bretton Woods Global Macro Economy event in Washington, D.C. Speech. In addition, the focus will turn to Bank of England Governor Andrew Bailey’s speech at the Mike Gill Memorial Conference hosted by the U.S. Commodity Futures Trading Commission (CFTC).
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