The Euro fell against the Pound for a second day on Tuesday, moving towards 0.8700 after reaching 0.8735 on Monday. The move came despite an upward revision to the Eurozone HCOB Services PMI.<\/p>\n
The Eurozone final services PMI was revised to 50.2 from a 50.1 preliminary reading, and was down from 51.9 in February. Spain rose to 53.3 from a 51.9 flash estimate, while France contracted for a third month and Germany was revised to 50.9 from 51.2, down from 53.5 in February.<\/p>\n
In the UK, the S&P Global Services PMI was revised down to 50.5 in March from a 51.2 flash estimate, and from 53.9 in February. The report linked these data to the economic effects of the war in Iran on the Eurozone and UK, as a deadline set by US President Donald Trump for Tehran expired.<\/p>\n
The article included a correction made on 7 April at 11:15 GMT, stating the preliminary UK S&P Global Services PMI was 51.2, not 51.0.<\/p>\n
Looking back, we remember this time in 2025 when the Euro was weakening against the Pound, testing the 0.8700 level. The economic data then was poor for both regions, largely due to the escalating conflict with Iran. Now, one year on, the situation has evolved, presenting different challenges and opportunities for us.<\/p>\n
Today, the Eurozone’s HCOB Services PMI for March 2026 has shown surprising strength, coming in at 52.9, a notable improvement from the sluggish 50.2 we saw a year ago. In contrast, the UK’s latest service sector reading is 51.5, showing resilience but still lagging the growth pace seen across the channel. This economic divergence is a key factor that was not present in 2025.<\/p>\n
This data suggests traders should be wary of assuming continued Sterling strength based on growth alone. However, inflation remains a bigger problem in the UK, with the latest CPI at 3.1% compared to the Eurozone’s 2.5%, forcing the Bank of England to maintain a more hawkish stance. This policy difference is the main reason we still see downward pressure on the EUR\/GBP pair.<\/p>\n
The energy shock from the Iran crisis in 2025 has had lasting effects, keeping baseline inflation elevated globally. We saw Brent crude oil prices spike to over $110 a barrel during that conflict, and they have since stabilized around a higher floor of $90. This continues to complicate the inflation picture for energy-importing regions like the UK and Europe.<\/p>\n
Given this, we see opportunities in positioning for further EUR\/GBP weakness, targeting a move towards the 0.8450 level in the coming weeks. Consider buying EUR\/GBP put options to limit risk while gaining exposure to a potential decline. The premium on these options reflects the market’s expectation that the European Central Bank will cut interest rates before the Bank of England does.<\/p>\n
Traders should closely monitor upcoming statements from both central banks for any change in tone. Any signal that the Bank of England is becoming more concerned about growth could quickly reverse the pair’s trajectory. For now, the path of least resistance appears to be lower for the Euro against the Pound.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Euro dips versus Pound, nears 0.8700 despite Eurozone PMI revision; UK services PMI downgraded, correction noted.<\/p>\n","protected":false},"author":103,"featured_media":17031,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-46875","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/46875","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=46875"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/46875\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17031"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=46875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=46875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=46875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}