EUR/USD Exchange Rate Falls as US Services Sector Continues to Expand
The Euro US Dollar (EUR/USD) exchange rate fell by -0.1% today as fluctuating risk-sentiment has continue to drive demand for the safe-haven ‘Greenback’. The pairing is currently fluctuating around $1.19.
The US Dollar (USD) has also benefited from an improving outlook for the US economy, which is the largest economy in the world.
Today saw the release of the latest US ADP Employment Change figure for April, which rose from 565 thousand to 742 thousand.
The latest US ISM Services PMI for April also continue to post a strong improvement, despite showing some signs of slowing in April following a record high.
The Euro Pound (EUR/GBP) exchange rate dipped today. The pairing is currently fluctuating around £0.86.
The Pound (GBP) rose against the single currency today following the stronger-than-expected UK manufacturing PMI for April. The figure beat estimates and rose to 60.9.
As a result, confidence in the UK economy continues to grow, buoying the GBP/EUR exchange rate as hopes grow this trend could improve in May and June, when lockdown restrictions are due to be further eased.
Rob Dobson, the director of IHS Markit, which compile the survey, commented:
‘Signs of Spring have appeared in the UK manufacturing sector, with the PMI hitting its highest level in a decade. Growth of output, order books and employment all gathered momentum and optimism about the year ahead improved further. The domestic market remained the prime source of new orders, as companies reported that the vaccine roll-out and clients’ preparations for the loosening of lockdown restrictions underpinned the expan
biggest boom in at least 14 years during April.
Demand surged at a pace not seen for 11 years amid growing recovery hopes and fresh stimulus measures.
However, Williamson notes that
supply chain delays worsened, however, running at the highest yet recorded by the survey, choking production at many companies. Worst affected were consumer-facing firms, where a lack of inputs has caused production to fall below order book growth to a record extent in over the past two months as household spending leapt higher.
Which is pushing prices dramatically higher.
“Suppliers have been able to command higher prices due to the strength of demand for inputs, pushing material costs higher at a rate not seen since 2008.