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Oct 24 - 12:55 AM

ANZ: Anticipating Potential EUR/GBP Downside Triggered by PMI Disparities

By eFXdata  —  Oct 23 - 04:30 PM

Synopsis: ANZ's market perspective this week tilts favorably towards the GBP, particularly in its standing against the EUR. The anticipation hinges on upcoming PMI releases, with the UK's indices historically showing robustness, especially within manufacturing. Despite the pervasive economic slowdown across developed nations, ANZ recognizes the potential for the UK's PMIs to outshine those of the EU, potentially catalyzing a modest downtrend in EUR/GBP in the ensuing week.

Key Takeaways:

  • Resilient PMIs Bolster GBP: Upcoming PMI data are in the spotlight, with past trends showcasing particular strength in the UK’s manufacturing sector. This resilience, in contrast to widespread economic softness, underpins the GBP's favorable positioning for the week.

  • Comparative PMI Performance Could Drive Currency Movement: While economic lethargy is a shared burden among developed countries, ANZ posits a stronger likelihood of the UK's PMIs outperforming their EU counterparts. This relative strength could be instrumental in exerting downward pressure on EUR/GBP pairings throughout the week.

  • GBP's Favorable Stand Against EUR: In the EUR/GBP dynamic, the anticipated data suggest a bullish outlook for the GBP. The currency pair's movement will likely hinge on the comparative economic health indicators released, with the UK poised for potential relative strength.

  • Acknowledgment of Prevailing Economic Weakness: Despite the optimism, ANZ acknowledges the overarching economic deceleration gripping the developed world. The bullish view on the GBP is nuanced, recognizing that broader market vulnerabilities persist.

Conclusion: ANZ forecasts a relatively positive stance for the GBP against the EUR in the immediate term, driven primarily by expected PMI releases. The UK’s historical resilience in these indices, particularly within manufacturing, sets the stage for potential outperformance versus the EU. This scenario could influence a slight retreat in EUR/GBP pairings throughout the week. However, the broader economic context remains cautious due to prevalent slowdowns in the global economy, warranting watchfulness in market movements.

ANZ Research/Market Commentary


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