GBP continues making headway against EUR

There was positivity in the GBP camp yesterday as the manufacturing data we saw at the start of the week continued to have abeneficial impact, despite a fall in construction seen yesterday morning. This has helped manifest as gains against EUR which ended with the pound breaching the much-sought level of 1.4000 – and the prediction is that we’ll see this strength run into the new year. Things weren’t so fruitful against the dollar though as it was a struggle to get above 1.5400.

On the data plate today we’ll see service sector PMI which is expected to improve to 54.6 from 53.3 – seen as key considering it accounts for 70% for the UK’s GDP.

On the mainland, Europe was weighed down by poor Spanish unemployment data after a drop of 56,000 was seen, an unwanted indicator of how things still aren’t great for some euro nations. There was a further knock following Draghi’s speech last night when he commented that the targeted inflation level still needs to be below 2%, effectively shoring up the need to increase QE and utilise other stimulus measures.

Today’s euro data will include a number of PMI releases that should reveal insight into the state of the Eurozone’s overall health.

There wasn’t much out by way of data for the US yesterday –what we only really saw were factory order figures, which came in weaker than expected, and a IBP/TIPP economic optimism survey which came in less than hopeful. This thankfully didn’t stop the dollar from dropping off too much against pound, whilst it held firm against the euro.

Today’s data from the States includes trade balance figures from September, ADP employment numbers, services PMI, and finally a speech by Janet Yellen later in the day.