The Pound Sterling unexpectedly moved higher after the latest economic news showed the UK economy at a worse state than had been expected. Analysts say that concerns over the Coronavirus are weighing more heavily than data is likely to, even in a situation where the figures are exceedingly poor.
Today's data, preliminary PMI figures for April, shows Markit survey results for the UK's manufacturing and services sectors. Analysts had predicted that the numbers would fall to 42 and 29, respectively, but the actual numbers were far lower at 32.9 and 12.3. Any number below 50 is indicative of a contraction in that sector. As the UK has the 5th largest economy in the world, economists are saying that GDP could contract as much as 13% this quarter.
As of 11:03 am in London, trading on the GBP/USD pair was higher at $1.2348, a gain of 0.1451%; the pair has ranged from $1.23077 to $1.23765 in today's session. The EUR/GBP was lower at 0.8722 Pence, down 0.5371% and off the session trough of 0.87202 Pence. The GBP/JPY was higher at 132.945 Yen, up 0.0798%, not far from the trading session peak of 133.454 Yen.
Eurozone PMIs Far Below Estimates
PMI data for the Eurozone was also dismal, falling far below expectations in every report for every Eurozone country. In Germany, the largest economy in the EU, the manufacturing PMI hit 34.4, services was 15.9 and the composite was 17.1; analysts had predicted 39, 28.5 and 31 for those sectors. The data was similarly bad in France, the second largest EU economy. That resulted in the EU's own reckoning with PMI figures plummeting. The impact to the EUR/USD still lingers with the pair trading lower at $1.0773, down 0.4463%, off the session low of $1.07676.