Pound to Euro (GBP/EUR) Exchange Rate Steady as the UK is on the ‘Precipice of an Unemployment Crisis’

GBP/EUR Exchange Rate Steady as UK Unemployment Data Weighs on UK Economic Mood

The Pound to Euro (GBP/EUR) exchange rate held steady this morning, with the pairing currently trading around €1.105.

Sterling failed to gain against the Euro (EUR) today following the release of August’s UK ILO Unemployment Rate, which rose to a worse-than-expected 4.5%.

Chancellor Rishi Sunak responded to today’s jobless figures:

‘I’ve been honest with people from the start that we would unfortunately not be able to save every job. But these aren’t just statistics, they are people’s lives. That’s why trying to protect as many jobs as possible and to helping those who lose their job back into employment, is my absolute priority.’

Today also saw the release of September’s UK Claimant Count Change figure, which beat forecasts and fell from 73.7 thousand to 28 thousand.

Frances O’Grady, the general secretary at the Trades Union Congress (TUC), commented:

‘We are on the precipice of an unemployment crisis. Ministers must act now to protect and create jobs. The expansion of the job support scheme is a step in the right direction, but it still falls short.’

The coronavirus pandemic remains a concern for the UK after Prime Minister Boris Johnson revealed a three-tier system yesterday.

Now that parts of the North are under stricter restrictions, GBP investors are becoming more concerned for the nation’s economy in the months ahead.

Euro (EUR) Steady as Concerns Grow over the Eurozone’s Economy

The Euro (EUR) held steady today with the outlook for the Eurozone’s economy remaining subdued as the Covid-19 situation holds back the bloc’s growth.

Francesco Pesole, a financial strategist at ING, commented:

‘EUR net-long positioning faced a minor setback in the week, which is probably linked to some repricing of European growth expectations after new restrictions being imposed and some fears that the EU Recovery Fund will be delayed.’

In other Eurozone economic news, today will see the release of the latest Eurozone ZEW Survey of Economic Sentiment for October.

If this deteriorates, then we could see the single currency begin to fall.

Germany’s ZEW Survey of the Current Situation for October is also expected to sink by -60.

As a result, the EUR/GBP exchange rate could sink later this morning.

GBP/EUR Forecast: Could a Lack of Brexit Progress Drag Down Sterling?

Euro (EUR) investors will be awaiting tomorrow’s speech from the European Central Bank’s (ECB) President Christine Lagarde.

If Mme Lagarde is notably downbeat about the Eurozone’s economic climate, then we will likely see the EUR/GBP exchange rate sink.

Tomorrow will also see the release of the August’s Eurozone Industrial Production report.

Any improvement in the Eurozone’s industrial or manufacturing sector would prove EUR-positive.

Pound (GBP) traders will be eyeing tomorrow’s speech from the Bank of England’s Chief Economist, Andy Haldane.

Any further hints that the bank could be taking interest rates into negative territory would prove GBP-negative.

The GBP/EUR exchange rate will continue to remain sensitive to Brexit and Covid-19 developments this week.

If the UK the EU  fail to make any progress towards a post-Brexit trade deal, then Sterling will suffer.

David Moore

Contact David Moore

Do Not Sell My Personal Information