Euro nudges up against British Pound with Eurozone and UK PMIs in focus
- EUR/GBP edges up to 0.8580 but remains halfway within recent ranges.
- Eurozone PMI is expected to show steady business activity, while the UK PMIs are seen slowing down in August.
- Lower Oil prices and hopes of more ECB rate hikes are providing some support to the Euro.
The Euro (EUR) edges up against the British Pound (GBP) for the second consecutive day on Wednesday, although it remains halfway within recent ranges, with trading volumes at low levels, and investors awaiting Purchasing Managers Index (PMI) data from the UK and the Eurozone. The EUR/GBP trades at 0.8580 at the time of writing, after bouncing from 0.8568 on Tuesday.
Later during the European session, the Eurozone’s Preliminary HCOB PMI figures from September are expected to show that the services sector’s activity edged up to 51.7, from 51.6 in August, and that the manufacturing sector remained steady at 52.7, highlighting a moderate expansion.
Before that, German PMIs are forecast to show solid manufacturing growth and a moderate improvement in the services sector, which is expected to have stalled in August, after five months of contraction.
In the UK, the S&P Global Manufacturing PMI is seen slowing down to 51.4 from August’s 51.7, and the Services PMI easing to 52.0 from 52.5 in the previous month, in both cases, showing levels consistent with a mild expansion.
A hawkish ECB and lower Oil prices are supporting the Euro
The Euro is drawing some support from the recent pullback in Oil prices. The price of the barrel of Brent Oil has dropped to $95.00, more than $10 below last week’s highs, providing some relief to the Oil-importing Eurozone economies.
Apart from that, the European Central Bank (ECB) hiked interest rates for the second time this year in September and hinted at further monetary tightening if inflation remains at high levels, which has provided additional support to the Euro. The Bank of England, on the contrary, left interest rates on hold last week, although three committee members voted for a quarter-point hike, and Governor Bailey left the door open for some monetary tightening, which contained the negative impact on the Pound.
Euro bulls, however, remain wary of the uncertain political situation in Germany, with Chancellor Friedrich Merz under question after the disastrous results in state elections last weekend. Beyond that, France's public debt has reached its highest level since 1978, which is calling the attention of the rating agencies and threatens to develop into a full-blown credit crisis.
Economic Indicator
HCOB Services PMI
The Services Purchasing Managers Index (PMI), released on a monthly basis by S&P Global and Hamburg Commercial Bank (HCOB), is a leading indicator gauging business activity in the Eurozone services sector. As the services sector dominates a large part of the economy, the Services PMI is an important indicator gauging the state of overall economic conditions. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Euro (EUR). Meanwhile, a reading below 50 signals that activity among services providers is generally declining, which is seen as bearish for EUR.
Read more.Next release: Wed Sep 23, 2026 08:00 (Prel)
Frequency: Monthly
Consensus: 51.7
Previous: 51.6
Source: S&P Global
Economic Indicator
S&P Global Manufacturing PMI
The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging business activity in the UK’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Pound Sterling (GBP). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for GBP.
Read more.Next release: Wed Sep 23, 2026 08:30 (Prel)
Frequency: Monthly
Consensus: 51.4
Previous: 51.7
Source: S&P Global
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
