Pound euro exchange rate flat following Eurozone unemployment
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning following the publication of the Eurozone’s latest unemployment rate.
At the time of writing, GBP/EUR is trading at around €1.2008, virtually unchanged from this morning’s opening levels.
Euro (EUR) holds steady following jobs data
The euro (EUR) is managing to hold steady against the majority of its peers this morning, marginally bolstered by the publication of the Eurozone’s latest unemployment rate.
The bloc’s unemployment reading held steady at record lows in August, coming in in line with market expectations at 6.4%.
Following yesterday’s EUR selloff in the wake of the Eurozone’s latest inflationary reading, which fell below forecast and below the European Central Bank (ECB) 2% target, ECB interest rate cut bets rose, which weighed heavily on the common currency and saw it dip to multi-month lows against several of its counterparts.
Karim Chedid, Blackrock’s Chief Investment Strategist for iShares EMEA commented:
‘The biggest driver of the market is the anticipation that the ECB may actually move from once a quarter cuts to back-to-back cuts. As we enter a new earnings season in Europe, there could be headwinds for the cyclical parts of Europe, given that the manufacturing slump is nowhere near done.’
However, the common currency is managing to hold steady against the majority of its peers moving into today’s European session.
Pound (GBP) flat amid lull in data
The pound (GBP) is trading mostly sideways against the majority of its peers this morning as a lack of fresh UK data releases sees the British currency trade without a clear trajectory.
However, offering the Pound some modest support this morning is a return to upbeat trade.
Following yesterday’s decisively risk-off mood amid escalating tensions in the Middle East, a return to cheery trading conditions today has marginally aided the increasingly risk-sensitive pound.
Pound euro exchange rate forecast: PMIs in the spotlight
Looking ahead, the primary catalyst of movement for the pound euro exchange rate looking ahead to tomorrow will likely be the publication of both the UK’s and the Eurozone’s finalised services PMI for September.
For the UK, the all-important services sector is forecast to marginally dip and expected to fall from 53.7 to 52.8. However, as the reading is forecast to remain firmly in expansion territory (a reading above 50), GBP exchange rates could firm in the wake of the release.
Turning to the Eurozone, the bloc’s own services index is also forecast to fall, expected to drop from 52.9 to 50.5, and could undermine the single currency should the data fall as far as expected.