GBP/EUR Exchange Rate Muted as UK Employment Figures Fail to Inspire Markets
The Pound Euro (GBP/EUR) exchange rate is trading in a narrow range this morning as Sterling appeared unable to build on yesterday’s gains despite an upbeat UK labour report.
At the time of writing GBP/EUR exchange rate is virtually unchanged from this morning’s opening levels, but still rests close to a one-month high following yesterday’s Brexit related bump.
Pound (GBP) Exchange Rates Weaken Despite Upbeat UK Wages Figures
The Pound (GBP) appears to have run out of momentum against the Euro (EUR) and most of its other peers this morning, despite the release of some positive UK labour statistics.
According to data published by the Office for National Statistics (ONS), the UK’s unemployment rate held at a 43-year low of 4% in July as the number of Britons out of work fell to just 1.36 million.
Of even more note was the accompanying earnings figures as they revealed wage growth unexpectedly jumped from 2.4% to 2.6% in July, keeping it just ahead of inflation over the same period.
However the data also shone a light on a worrying large number of job vacancies in Britain, with analysts expressing concerns that this is likely to weigh on growth going forward.
Suren Thiru, head of economics at the British Chambers of Commerce said:
‘The number of job vacancies in the UK remains at an alarmingly high level, further evidence of persistent skills shortages.
While the number of people in work stands close to historic highs, firms continue to report that attempting to recruit staff with the right skills is an increasingly uphill struggle, which is stifling their ability to grow and boost productivity.’
Pound Euro Exchange Rate Forecast: Will Central Bank Rate Decisions Impact GBP/EUR?
Looking ahead to the second half of this week’s session, the main catalyst for movement in the Pound Euro (GBP/EUR) exchange rate is likely to the latest rate decisions from each currency’s respective central bank.
In terms of the Pound, the Bank of England’s (BoE) latest policy meeting is unlikely to result in any major news, given that the bank voted to raise interest rates just last month.
Instead markets are likely to be focused on the BoE’s economic outlook, with Sterling potentially trending lower should the bank remain wary in the face of ongoing Brexit uncertainty.
Meanwhile the European Central Bank’s (ECB) latest policy meeting is also highly unlikely to result in any changes to interest rates, with the bank having voted to keep rates on hold until summer 2019.
However the Euro could still be spurred into moving higher should the ECB remain upbeat regarding the fundamentals behind the Eurozone economy, particularly in regards to inflation