EUR/GBP Dips on German PMIs: South Africa Watches Closely

  • The EUR/GBP currency pair faced a significant drop due to disappointing German PMI data, reaching a one-year low but showed some resilience just above the 0.8500 mark.
  • Germany's manufacturing sector showed a slight improvement in August, but the services sector contracted unexpectedly, intensifying concerns about a deeper economic downturn in the region and influencing the European Central Bank's potential decision on rate hikes.
  • Despite the downtrend of the Euro, the British Pound's decline was limited, largely due to increasing expectations of further interest rate hikes by the Bank of England in the upcoming September meeting.

The EUR/GBP pairing experienced a significant downward thrust in Wednesday’s early European trading hours, touching a nadir not seen in a year. This drop was primarily driven by less-than-stellar German PMI figures. Nevertheless, a slight recuperation was evident as spot prices inched upwards, currently showcasing only minor intraday declines and hovering just over the crucial 0.8500 benchmark.

Recent insights from the HCOB survey highlighted a subtle mitigation in Germany’s manufacturing downturn for August. Contrarily, a surprising contraction was observed in the services sector for the said month. Specifically, the HCOB Manufacturing PMI registered at 39.1, which is an improvement from July’s 38.8 and marginally surpasses the anticipated 38.7.

However, the Services PMI presented a more concerning picture, plummeting from 52.3 in July to 47.3 in August— a stark miss from the projected 51.5 and marking its lowest in nine months. This unfavorable data has amplified concerns surrounding a deepening economic slump. Moreover, speculations are rife that the European Central Bank (ECB) may deviate from its pattern of nine straight rate hikes come September. Such speculations have burdened the shared currency, pushing the EUR/GBP pairing downward for two consecutive days. Nevertheless, a dip in the British Pound (GBP) has propped up spot prices, prompting a modest recovery of 15-20 pips from its lowest point.

For South African investors, the dynamics between these major currencies hold importance. The Sterling’s vulnerability is somewhat buffered due to increasing anticipations of additional interest rate hikes from the Bank of England (BoE). Present market indicators suggest an over 80% likelihood of a 25 bps surge at the forthcoming BoE assembly in September. Consequently, the foreseeable trajectory for the EUR/GBP pairing seems bearish, implying that any significant resurgence might be viewed as an opportunity for sellers.

Visited 1 times, 1 visit(s) today

Stay ahead in the financial world – Sign Up to Rateweb’s essential newsletter for free. Get the latest insights on business trends, tech innovations, and market movements, directly to your inbox. Join our community of savvy readers and never miss an update that could impact your financial decisions.

Do you have a news tip for Rateweb reporters? Please email us at


Start trading with a free $30 bonus

Trade stocks, forex, commodities, metals and CFDs on stock indices with an internationally licensed and regulated broker. For all clients who open their first real account, XM offers a $30 trading bonus without any initial deposit needed. Learn more about how you can trade over 1000 instruments on the XM MT4 and MT5 platforms from your PC and Mac, or from a variety of mobile devices.


Personal Financial Tools

Below is a list of tools built to assist South Africans to make the best financial decisions:



South Africa’s primary source of financial tools and information

Contact Us


Rateweb strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions.

Rateweb is not a financial service provider and should in no way be seen as one. In compiling the articles for our website due caution was exercised in an attempt to gather information from reliable and accurate sources. The articles are of a general nature and do not purport to offer specialised and or personalised financial or investment advice. Neither the author, nor the publisher, will accept any responsibility for losses, omissions, errors, fortunes or misfortunes that may be suffered by any person that acts or refrains from acting as a result of these articles.