Euro Edges Up Against Pound as PMI Data Looms

The Euro nudged up against the British Pound on Wednesday, continuing its upward trend from the previous day. The EUR/GBP exchange rate rose to 0.8580 after bouncing back from 0.8568 on Tuesday. Trading volumes remain low as investors wait for key economic indicators.

Later in the European session, Preliminary HCOB PMI figures are expected to show that the Eurozone's services sector grew at a moderate pace, with an index reading of 51.7. The manufacturing sector is forecast to remain steady at 52.7. In the UK, S&P Global Manufacturing and Services PMIs are seen slowing down, with readings of 51.4 and 52.0 respectively.

The Euro's recent gains can be attributed to a hawkish European Central Bank (ECB) and lower oil prices. The price of Brent Oil has dropped to $95.00, providing relief to the oil-importing Eurozone economies. However, Euro bulls remain cautious due to the uncertain political situation in Germany and France's high public debt.

The ECB's interest rate hike and hint at further tightening have provided additional support for the Euro. In contrast, the Bank of England left interest rates unchanged last week, with some committee members voting for a quarter-point increase. Governor Bailey signaled that monetary policy may be adjusted in the future.