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Pound holds steady vs euro as optimism grows over UK economy

UK Manufacturing PMI rose sharply in March to 58.9

The pound held steady vs the dollar on Thursday, while down slightly against the euro, as traders are optimistic over its outlook.

During Q1 of 2021 the pound enjoyed its strongest performance since 2015, gaining 4.8%.

UK Manufacturing PMI rose sharply in March to 58.9, a ten-year high, according to research by IHS MARKIT / CIPS, as optimism around an economic recovery intensifies.

Just before lunchtime on Thursday, the pound was at $1.37725, while versus the euro, the pound was down by 1% at 85p per euro.

The public mood around the government’s handling of the pandemic and recovery has become an optimistic one.

A survey conducted by the British Chambers of Commerce said over half of companies anticipated higher revenue levels in the coming year.

This is despite the present business environment remaining worse than the levels prior to the pandemic as the UK entered 2021 in a lockdown.

“While the GBP may continue to struggle vs. the USD in the current environment, we expect that it will remain well supported vs. low yielding G10 currencies such as the CHF, JPY and the EUR,” Rabobank senior FX strategist Jane Foley wrote.

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