EUR/GBP falls to near 0.8350 following UK Eurozone PMI data

• EUR/GBP continues to lose ground following weaker than expected PMI data from both economies.
• UK manufacturing PMI fell to 51.5 in September from 52.5 in August, missing market expectations of 52.3.
• Eurozone HCOB composite PMI fell to 48.9 in September, down from 51.0 in August and marking an eight-month low.

EUR/GBP extends its winning streak for a fourth straight day after weaker-than-expected Purchasing Managers’ Index (PMI) data from both the Eurozone and the United Kingdom (UK). EUR/GBP is trading around 0.8360 during European hours on Monday.

The preliminary S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) fell to 51.5 in September from 52.5 in August, missing market expectations of 52.3. Similarly, the services PMI fell to 52.8 in September from 53.7 in August, also below the market forecast of 53.5.

Chris Williamson, chief business economist at S&P Global Market Intelligence said: “A slight slowdown in output growth in the manufacturing and services sector in September should not be considered too concerning.”

In the euro area, the HCOB PMI composite fell to 48.9 in September, down from 51.0 in August and well below the expected 50.6, marking an eight-month low. The services PMI fell sharply to 50.5 from 52.9 in August, significantly underperforming market forecasts of 52.4 and hitting a seven-month low. Meanwhile, the PMI for manufacturing fell further, falling from 45.8 in August to 44.8 in September, missing the expected level of 45.6 and hitting a nine-month low.

European Central Bank (ECB) President Christine Lagarde said on Friday that monetary policy must remain adaptable in an ever-evolving world. Although the basic objectives of monetary policy, especially price stability, remain the same, central banks must retain flexibility to meet the challenges of a rapidly changing global economy, according to Euronews.