As the UK construction PMI rises, the GBP suffers under the weight of Eurozone inflation.
Tuesday sees sterling as the victim of Europe’s success in controlling inflation; for though the UK is gaining a growth pattern in 2015, Europe is also reporting positive data.
Eurostat, the EU statistical agency, released forecasts on Monday that gave strength to the failing single currency; ‘Euro area annual inflation is expected to be -0.3 % in February 2015, up from -0.6 % in January.’
The agency also said on Tuesday that developments in the unemployment figures promised positive estimates; ‘Eurostat estimates that 23.815 million men and women in the EU-28, of whom 18.059 million were in the euro area (EA-19), were unemployed in January 2015. Compared with December 2014, the number of persons unemployed decreased by 156 000 in the EU-28 and by 140 000 in the euro area. Compared with January 2014, unemployment fell by 1.820 000 in the EU-28 and by 896 000 in the euro area.’
In the UK, the construction PMI data demonstrated growth in the economy, maintaining an above contraction figure of 60.1, coming in above the forecast of 59.0, which was also above January’s figure of 59.1.
Though this higher figure would normally be taken as bullish for the GBP, opposing currencies in major pairs found more strength with the euro seeing a Monday rise against sterling of nearly 0.5%. Tuesday gave GBP a slight edge as Bank of England’s governor Mark Carney is due to talk, and on Thursday both the central banks of England and Europe will hold their meetings to discuss inflation rates; both are expected to stay the same.
MT4 chart: EURGBP
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