Having recovered from its cold snap, the GBP managed to retain its recent gain over the weekend.
Tuesday saw positive news for the UK’s manufacturing industry despite the ‘Beast from the East’ halting consumer spending.
Despite a rocky start to the month, the end of March saw the UK manufacturing industry steadily grow.
In a comment from Laura Parsons, a currency analyst at TorFX, she explained yesterday’s PMI results beat expectations.
Laura said: “A better-than-forecast UK manufacturing PMI helped the pound stand firm against the euro on Tuesday, with GBP/EUR achieving €1.142.”
This unexpected result comes as British factories reported a rise is production demand.
A surprising result seeing as the manufacturing sector experienced its weakest quarter in a year according to the Guardian.
However, looking forward ahead of the pound’s forecast today, Ms Parsons revealed: “Today’s UK construction report is expected to show a slight dip in output.”
If the report is correct, this dip in the pound may cause the exchange rate to slum once more.
Laura warned: “If this proves to be the case, and if the Eurozone’s consumer price index reveals an acceleration in inflation, GBP/EUR could slip in the hours ahead.”
She went on to explain that investors need to keep a close eye on the Eurozone’s unemployment rate for a sign of a potential fall.
If the March inflation rate data does indicate a rise as is predicted, the GBP/EUR could steadily rise.
She said: “The Eurozone unemployment rate is also expected to fall, an outcome which would lend the common currency further support.”
Previous data indicated that the manufacturing measure was forecast to have eased up from 55.2 to 54.7 in March.
The position of the UK within the EU and single market is still a cause for concern for economists.
With so much left unsaid as to how the UK will be able to trade with the EU, a number of daunting questions hang over the future of the GBP/EUR exchange rate.
For British holidaymakers looking to change their money, the post office is offering a euro exchange rate of 1.111.
According to the Consumer Intelligence (CI), travellers should steer clear of withdrawing or changing vast quantities of cash.
Instead, tourists are being urged to opt for travel cards which, are not only much safer than carrying cash, but also offer a better exchange rate for Britons.