GBP/EUR Exchange Rate as German Unemployment Crisis Weakens Single Currency
The Pound Euro (GBP/EUR) exchange rate rose after German job market data disappoints. The Eurozone’s largest economy’s unemployment rose unexpectedly this month. The pairing is currently trading around €1.15.
Germany’s Labour Office said that the number of people unemployed had increased by 9,000 in seasonally adjusted terms to 2.760 million.
Analysts at Reuters commented:
‘German unemployment rose unexpectedly in April and companies put more staff on shorter working hours in subsidized job protection schemes, data showed on Thursday, in a further pandemic-related setback for a fragile recovery in Europe’s largest economy.’
Today also saw the release of the latest Eurozone Consumer Confidence figure for April, remain in negative territory at -8.1%.
Euro (EUR) traders will be awaiting today’s publication of Germany’s harmonised index of consumer prices for April.
Any further signs of a set-back for the Eurozone’ largest economy would drag down the Euro Pound exchange rate.
Pound (GBP) Steady Despite NatWest Bank Seeing ‘Reasons for Optimism’ in UK Economy
The Pound (GBP) failed to rise against the Euro (EUR) today despite news that NatWest bank now sees ‘reasons for optimism’ as the UK’s vaccine rollout continues to steam ahead.
NatWest CEO Alison Rose was cautiously optimistic, however, saying:
‘Defaults remain low as a result of the UK Government support schemes and there are reasons for optimism with the vaccine programmes progressing at pace and restrictions being eased.’
Rose also highlighted the fact that ‘continuing uncertainty for our economy and for many of our customers as a result of Covid-19’ had however put a dampener on the business.
However, following yesterday’s report form the Confederation of British Industry (CBI), which showed a robust surge in the retail sector, Pound investors have become more confident.
CBI recorded its sharpest growth in sales since 2018.
Fraser McKevitt, head of retail at Kantar, said that buying ‘habits are slowly returning to normal.
Pound Euro Exchange Rate Forecast: Could UK Economic Optimism Continue to Boost Sterling This Week?
Euro (EUR) traders are looking ahead to the latest Eurozone flash GDP figure for the first quarter.
Any improvement in the outlook for the Eurozone’s economy would boost the EUR/GBP exchange rate.
Tomorrow will also see the release of the Eurozone’s preliminary consumer price index. If this shows an improvement in the bloc’s economic outlook, then the single currency would head higher against the Pound.
The Pound Euro exchange rate could continue to climb higher this week, however, if the outlook for the UK’s economy continues to improve as the Government continues to steam ahead with Covid-19 vaccine rollouts.