industry

Pound euro exchange rate: GBP firms against EUR on strong UK labour report


The pound is firming in trade this morning as markets welcome the release of the UK’s latest employment figures. According to data published by Office for National Statistics (ONS), the UK’s unemployment rate unexpectedly fell from 4.1 per cent to 4 per cent in November. This came as a result of a surprisingly strong lift in employment growth in November, with an influx of 141,000 new workers helping to propel total employment to 32.5 million, a new record high. However, potentially having a greater impact on the pound this morning is the accompanying earnings report, as wage growth (including bonuses) climbed from 3.3 per cent to 3.4 per cent in the three months to November.

This was the fastest increase in wages since July 2008, and apart from providing consumers with more spending power, it is likely to bolster the case for the Bank of England (BoE) to continue raising interest rates in 2019.

At the same time, the euro faces some pressure this morning following the publication of ZEW’s latest eurozone economic sentiment index.

Despite a modest improvement, the index revealed economic analysts in the eurozone remain broadly downbeat at the start of 2019, with slowdown concerns continuing to drag on sentiment.

Looking ahead, the pound euro exchange rate may surge higher in the latter half of this week’s session as euro investors are given their first insight into how the Eurozone is faring in 2019.

Thursday will see the release of the Eurozone’s latest PMI figures, which after striking a four-year low at the end of 2018 will likely weigh on the euro if private growth remained subdued in January.

Potentially having an even greater impact on EUR exchange rates will be the European Central Bank’s (ECB) subsequent rate decision.

The appeal of the euro will likely to be dented if the recent run of gloomy eurozone data leads to a more cautious outlook from the ECB this month.

In the meantime, barring any major Brexit developments, movement in the pound may be driven lower by the Confederation of British Industry’s (CBI) industrial orders figures on Wednesday, which economists forecast will have slipped this month.



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.