Pound to euro exchange rate climbs after positive UK manufacturing growth data

The pound is currently trading against the euro at €1.127, according to Bloomberg.

After starting the week at a struggling €1.124, it briefly hit highs of €1.128 yesterday.

The exchange rate has been aided by high manufacturing growth in the UK, which saw the 0.4 per cent increase of the pound against the euro.

According to CIPS Purchasing Managers’ Index (PMI) figures, the manufacturing sector was up from 53.0 to 53.8 in September.

The growth was influenced by orders from domestic markets, which resulted in the four-month high.

Laura Parsons, currency analyst at TorFx, explained to the Express what this meant for the pound.

She said: “The GBP/EUR exchange rate extended gains on Monday, climbing 0.4 per cent on the day’s opening levels and briefly hitting a high of €1.128.”

However, IHS Markit director Rob Dobson, also part of the research figures, warned Brexit would still affect the growth.

He also advised a “volatile exchange rate” made it difficult to estimate future activity, according to City AM.

This, in turn, could affect hiring and additional costs in the coming months.

Ms Parsons also warned the Eurozone had hindered some of the pounds growth.

She said: “While the UK’s manufacturing PMI exceeded forecasts (coming in at 53.8 rather than 52.5), the Eurozone equivalent fell short and German retail sales data disappointed.”

However, a recent report found unemployment in the Eurozone reached nearly a ten year low in August.

Joblessness in 19 of the countries fell to 8.1 per cent, the lowest since November 2008.

Approximately 13.22 million people did not have a job in the Eurozone, a decline from July of more than 100,000.

Later data released today could aid the pound even further, according to Ms Parsons.

“If today’s UK construction index impresses the pound could start nudging €1.130,” she told Express.co.uk.

The UK construction Index is expected to see a slight dip for September.