Sterling climbing against the euro shortly after a business survey showed the German manufacturing sector contracted for the fourth month in a row. The German flash manufacturing PMI was weaker than expected at 44.5 in April, well below the 50.0 mark separating growth from contraction. The figure made for disappointing reading for the largest economy in Europe, despite it being slightly up on the previous month, which came in at 44.1. Sterling was boosted by the weak performance and at 9.01am UK time was trading at €1.1556.
The pound was down against the US dollar though and was at $1.3027.
By 10.35pm, Sterling was trading at €1.1562 and $$1.3014.
The currency then crept slightly higher against the euro at 2.59pm to €1.1570, while continuing to drop versus the US dollar at $1.3005.
The picture of a slowdown was mirrored across Europe as a whole with the flash manufacturing PMI for the eurozone registering a reading of 47.8 in April versus the 47.9 expected.
However, the figure did mark a two-month high for the eurozone.
For France, the economy appeared to be stagnating with the flash manufacturing PMI at 49.6, down from the 50.0 expected.
The euro tumbled a quarter of a percent after the release of the data.
Chris Williamson, Chief Business Economist at IHS Markit: “The eurozone economy started the second quarter on a disappointing footing, with the flash PMI falling to one of the lowest levels seen since 2014.
“The data add to worries that the economy has failed to rebound with any conviction from one-off factors that dampened activity late last year, and continues to show only very modest growth in the face of headwinds from slower global demand growth and subdued economic sentiment.
“The surveys indicate that quarterly eurozone GDP growth has slowed to just under 0.2 percent.
“A similar 0.2 percent rate of expansion is being signaled for Germany but France stagnated and the rest of the region has moved closer to stalling.”
In UK news, the Office for National Statistics revealed today how retail sales surged in March.
Sales were up 1.1 percent on February, well above expectations of a fall of 0.3 percent, driven by food and non-store retailing.
Yesterday saw the ONS release property figures showing British house prices rose in February at the weakest rate in six-and-a-half years.
Meaning, consumer price inflation was unexpectedly held just below the Bank of England’s 2 percent target in March.
Meanwhile employment and wage revealed the UK labour market is robust in the face of Brexit uncertainty.
The data showed the number of people in work hit the highest total since records began in 1971, with those classed as employed reaching 32.7 million for the three months to February.
Unemployment fell by 27,000 to 1.34 million, with the rate of 3.9 percent now lower than at any time since the end of 1975.
Average earnings increased by 3.5 percent in the year to February, unchanged from the previous month.
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