The Pound hit a six-month high against the Euro last week, capping four months of its biggest gains since 2015. Sterling has climbed nearly 6 per cent since August on rising hopes that Brexit could finally be resolved.
That said, the currency is still 10 per cent below its pre-referendum levels, with analysts at US investment bank Goldman Sachs saying that a Tory election victory on 12 December could boost the Pound further.
Key data releases
Sterling’s could continue its ascent this week as Purchasing Manager’s Index (PMI) data is released for the manufacturing sectors in the Eurozone and the UK.
08:55 (GMT) – German manufacturing PMI for November – Previous: 42.1; Forecast: 43.8
09:00 – EU manufacturing PMI for November – Previous: 45.9; Forecast: 46.6
09:30 – UK manufacturing PMI for November – Previous: 49.6; Forecast: 48.3
Today’s release will indicate how well Europe’s powerhouse is faring and could set the markets’ direction for the week. Germany’s manufacturing sector has been incredibly weak of late. If the figures today show anything but an improvement, the Euro is likely to weaken further against its peers.
Meanwhile, the UK’s manufacturing has also been forecast to weaken, but this may not affect Sterling’s upward trajectory. The sector makes up a far lower proportion of the UK economy compared to Germany. As such the focus for the Pound will continue to be the upcoming election and the potential for the Brexit saga to come to an end in January.
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