Euro to pound sterling exchange rate (EUR/GBP) in slump as Eurozone composite PMI data disappoints

At 09:40 in London we see the euro to sterling exchange rate has fallen back 0.1 pct to reach 0.8515.

The pound to euro is thus quoted at 1.1744.

Keep in Mind: The above are inter-bank quotations. Your bank will levy a spread when passing a retail rate; hence why you never get close to the market rate. An independent FX provider will however guarantee to undercut your bank's offer, delivering up to 5% more currency. Find out more here.

Eurozone PMI data lets the euro down

There had to be some sort of catalyst to undermine the euro which has so far been steadily appreciating across the global FX space.

The trigger came in the form of some underwhelming PMI data out of the Eurozone.

Both France and Germany saw their manufacturing and service sector PMI miss the mark.

However, it was the release of the pan-Eurozone PMI data that got traders selling the single currency.

"Flash PMI data for France, Germany and the Eurozone will be the main focus this morning, and better than expected numbers should be necessary to extend the EUR strength seen in recent days," say Lloyds Bank Research highlighting the need for a positive outcome to sustain the recent rally.

The provisional Markit Manufacturing PMI (Oct) figure came in at 51.3, a shave lower than expectations of 51.4.

Markit PMI Composite (Oct) Preliminary came in at 51.5, analysts had predicted 52.5.

Markit Services PMI (Oct) Preliminary came in at 50.9, below expectations for 52.4.

"As the first significant data for October, these flash PMIs are increasingly important, but even if strong, there is little scope for higher EUR yields from here, and with cross currency basis also now getting close to zero, the relationship of EUR/USD with forward points suggests quite limited EUR/USD upside scope even on good news," say Lloyds Bank Research. The headline EUR/USD will be important in directing the EUR/GBP, so keep an eye on this rate.

Further guidance for the pound to euro exchange rate will be garnered at 11 AM BST when the CBI Industrial Trends data is released.

Analysts are looking for a reading of 10. However, we don't expect too much of an impact ahead of tomorrow's all-important GDP data release.