GBP/EUR Exchange Rate Struggles as UK Joblessness Rises in November
The Pound to Euro exchange rate fell by -0.2% today. The pairing is currently trading around €1.12.
Sterling suffered this morning following the publication of the UK’s latest Unemployment Rate report for November, which rose by 5% – a four-year high.
UK redundancies also soared to a record high of 14.2 per 1,000 in the three months leading up to November.
UK unemployment rate hits 5% in Nov says @ONS
That’s 1.72 million people out of work; up 202k on quarter pic.twitter.com/sHtAnzTF6C— Helia Ebrahimi (@heliaebrahimi) January 26, 2021
Vacancies also slowed between October and December, sparking concerns that joblessness could continue to rise in the months ahead.
Rishi Sunak, the Chancellor of the Exchequer, commented:
‘This crisis has gone on far longer than any of us hoped – and every job lost as a result is a tragedy. Whilst the NHS is working hard to protect people with the vaccine we’re throwing everything we’ve got at supporting businesses, individuals and families.’
However, with Britain’s national lockdown expected to go beyond the mid-February Government review, UK markets are becoming increasingly jittery.
Euro Rises as Germany’s Economic Outlook is ‘Considerably Brighter’
The Euro rose today after reports that German exporters have become more confident about the Eurozone’s economy going forward.
January saw morale in Germany’s industrial sector hit its highest level since October, according to the IFO economic institute.
President of the IFO, Clemens Fuest, explains:
‘Clarity on Brexit and the US presidency, a robust industrial economy and the start of global vaccinations have led to cautious optimism in the German export industry.’
With German exporters reportedly ‘considerably brighter’ about the Eurozone’s economic outlook, the EUR/GBP exchange has benefited.
Yesterday also saw the President of the European Central Bank (ECB), Christine Lagarde, say that the Eurozone’s economy had been delayed but – crucially – not derailed.
Could Rising German and French Consumer Confidence Boost the Single Currency?
Euro traders will be awaiting tomorrow’s release of February’s German Consumer Confidence Survey.
If the outlook for the German economy – the largest in the Eurozone – continues to improve, then we will see the single currency rise.
Tomorrow will also see the release of the French Consumer Confidence report for January. Any improvement in the outlook for the French economy would also be EUR-positive.
The GBP/EUR exchange rate will continue to be driven by the UK’s Covid-19 developments this week.
Any signs that Downing Street is on target to vaccinating the top four priority groups by mid-February would boost Sterling.