Happy holidays: The euro has fallen from its high against the pound (for now)

Emma Haslett
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British Holidaymakers In Lloret De Mar
Happy holidays: The euro has edged off historic highs against the pound (Source: Getty)

A disappointing purchasing manager's index (PMI) has sent the euro slightly lower against the pound - just as the UK's holiday season gets underway.

The euro, which hit an eight-month high against the pound last week, fell 0.25 per cent against sterling, to £0.89518, after Markit's composite PMI for the eurozone missed expectations.

The figure, which takes into account the manufacturing, construction and services sectors, fell to 55.8, against expectations of 56.2, although it was still firmly above the 50 mark, below which denotes a contraction.

Read more: European markets are seeing red as the week ends

Meanwhile, composite PMIs from Germany and France were also disappointing, with Germany's falling to 55.1, against expectations of 56.3, while France's dropped to 55.7, against forecasts of 56.4.

The euro has been on a roll since last week's European Central Bank (ECB) press conference, when the currency hit its highest against the dollar in almost two years after the ECB's president, Mario Draghi, dropped hints tighter monetary policy is on the way.

Today the euro edged down 0.1 per cent against the dollar, to $1.1645 - but analysts warned the dip won't last.

"The softness in the US dollar has been an opportunity for the euro-bulls to extend gains posterior to a little insightful ECB meeting last week," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.

"The [euro] shortly retreated... amid the softer-than-expected flash PMI data from Germany and France. Still, the single currency remains at the bulls’ hands."

Read more: Gold prices climb past $1,255 on a weak US dollar

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