The Pound to Euro exchange continues to rally over the last few sessions, as pound exchange rate rallying over its peers amid a higher-than-forecast Services PMI. Growth in the UK economic indicators suggests the country has strongly repelled headwinds arise after Brexit.
Analysts say the recovery in the GBP/EUR currency conversion rate is expected to extend its surge on the back of a positive data.
The GBP to EUR rate continues to recover since the mid-August, amid strong housing, retail and manufacturing data, which is forcing forex traders to accept the data coming out of the Great Britain’s economy.
UK’s employment rate and earnings data posted a surprise growth in the labor market. Based on employment data, those seeking out-of-work benefits actually declined 8.6K, when analysts suggested a growth of 9.5K. Britain’s unemployment rate remains around 4.9%.
These figures show that the unemployment rate stood at a post-crisis level of 4.9% while the employment rate surged to a record level of 74.5%.
Although eurozone economy is moving in line with recent estimates, prospects for sustainable growth are very low, as three top euro zone economies are fumbling. Germany, Italy and France have posted negative growth in the second quarter this year, compared with analyst forecasts.
Morgan Stanley analysts said that GBP/EUR currency exchange rate is likely to bounce further in the coming days on the back of improving business fundamentals. The Pound Sterling’s to Euro exchange rate currently stands around 1.19336
On the other hand, there are several risks that are weighing on euro exchange rate. Slow economic growth from major European countries and falling employment rate hindering euro currency conversion rate against the GBP and USD. Morgan Stanley believes that GBP exchange rate has further 3% upside potential against the euro currency rate.