• The Euro holds firm after Eurozone PMI data exceeded expectations, showing the strongest services growth in a year.
• UK Retail Sales unexpectedly rise for the fourth consecutive month, supporting the British Pound.
• EUR/GBP remains stable around 0.8720 as both currencies draw support from improved economic data.

EUR/GBP trades steady around 0.8720 on Friday at the time of writing, virtually unchanged for the day, as investors balance upbeat macroeconomic data from both sides of the Chunnel.

The Euro (EUR) finds renewed support after preliminary October figures from the Hamburg Commercial Bank (HCOB) Purchasing Managers Index (PMI) revealed that Eurozone business activity expanded more strongly than expected.

The Manufacturing PMI improved to 50.0 from 49.8 in September, while the Services PMI climbed to 52.6 from 51.3, marking the fastest pace of expansion in a year. These results suggest that the Eurozone economy is regaining momentum and reinforce the case for the European Central Bank (ECB) to maintain a restrictive policy stance.

Earlier in the day, the British Pound (GBP) strengthened following an unexpected increase in United Kingdom (UK) Retail Sales, which rose 0.5% MoM in September, defying market expectations of a 0.2% decline. The Office for National Statistics (ONS) also revised August’s reading upward to 0.6%.

The flash UK S&P Global PMI data also supported the GBP, showing that overall business activity expanded faster than expected in October. The Composite PMI rose to 51.1, up from 50.1 in September and above consensus estimates of 50.6, signaling a modest but steady recovery in private sector output.

The Services PMI increased to 51.1 from 50.8, reflecting stronger demand in consumer-facing industries, while the Manufacturing PMI climbed to 49.6, its highest level since April, suggesting that the contraction in industrial activity is easing. These results help ease concerns about the UK’s economic resilience and give the Bank of England (BoE) some reassurance after recent signs of cooling inflation.

The balance of these developments leaves the EUR/GBP rangebound for now on Friday.