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Pound Euro Exchange Rate to Bolster on Strong UK Jobs Data?

Pound Coin on Euro Banknote GBP/EUR

GBP/EUR Exchange Rate Firms Despite Darkening UK Economic Outlook

The Pound Euro (GBP/EUR) exchange rate is strengthening today as the risk-averse market becomes increasingly concerned with a global recession.

At time of writing the GBP/EUR exchange rate is around €1.1855, a 0.28% rise from the morning’s opening levels.

Pound (GBP) Climbs Despite Cost-of-Living Crisis Set to Worsen

The Pound (GBP) is finding relative strength against some of its peers today despite the worsening cost-of-living crisis as energy bill prices are set to skyrocket.

Political volatility looks set to keeping a firm lid on any meaningful gains, as investors remain concerned at both leadership candidates’ failure to lay out solid fiscal policies to support UK households. As household energy bills are set to soar by 80% in the winter, experts and analysts are concerned with the lack of substantial action from the government. Institute of Fiscal Studies has issued a warning that the government need to provide an additional £12Bn in support to keep up with the surging energy prices.

Looking ahead, and a busy week for the Pound could see further fluctuations. Unemployment data is expected to remain steady, marking a third consecutive month of low unemployment. A continued robust labour market, despite soaring living costs bodes well for the Pound. Elsewhere, the inflation reading for July is due on Wednesday, and fears of a further acceleration of the CPI could lead to worsening cost-of-living concerns, and in turn, the demand for Sterling.

Euro (EUR) Struggles for Demand in the Rising Risk-Averse Market

The Euro (EUR) is slipping today as a fading global market sentiment is compounded by growing fears of a Euro recession.

Poor data out of China has sapped confidence and piled pressure on risk-sensitive currencies, with both retail sales and industrial production both showing less-than-expected growth. With China’s zero-Covid policy still upheld, fears of another economic slowdown in the world’s second largest economy could have ramifications on a global scale as recession fears grow.

Looking ahead and a busy week for the Eurozone could see big movements with the single currency. GDP growth, employment data, and inflation data for the Euro area are all set to print this week. With unemployment expected to increase, inflation rising, and GDP shrinking, the Euro could plummet, confirming economist’s gloomy predictions of an impending recession.

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