Euro Pound (EUR/GBP) Exchange Rate Muted as Eurozone Unemployment Dips to 11 Year Low
The Euro Pound Sterling (EUR/GBP) exchange rate remained muted, and the pairing is currently trading at an inter-bank rate of £0.8956.
On Monday, data showed that the Eurozone’s unemployment rate dipped to a lower-than-forecast 7.5% in May.
Eurostat reported that unemployment in the bloc hit a fresh 11 year low as almost every member of the EU saw jobless levels fall.
The number of people without work fell by 103,000, pushing the jobless rate to its lowest level since July 2008.
However, the single currency remained muted against Sterling on Monday afternoon.
Sterling (GBP) Muted as Manufacturing Falls to 76-Month Low
Sterling remained under pressure as data revealed that the UK manufacturing PMI slumped to a 76-month low.
The manufacturing PMI fell for the third consecutive month, from 49.4 in May to 48 in June.
Added to this, manufacturing production plummeted at the quickest pace since October 2012.
Commenting on the data, Rob Dobson, Director at IHS Markit said:
‘The downturn in UK manufacturing deepened during June, as the impact of firms unwinding stockpiles built before the original Brexit date continued to reverberate through the sector and exacerbate weak demand. This led to solid decreases in both production and new orders, which sank the headline PMI to its lowest in almost six-and-a-half years.’
Euro (EUR) Flat as German Manufacturing Remains Below 50-Mark
Meanwhile, the German manufacturing sector contracted for the sixth consecutive month in June.
The German manufacturing PMI rose to a four month high of 45 in June.
The rise in the index was largely due to new orders, as the rate of decline eased for the third month in a row.
However, June’s PMI remained well below the 50-mark and close to its lowest level since 2012.
Commenting on the data, Principle Economist at IHS Markit, Phil Smith said:
‘Although inching up in June, Germany’s manufacturing PMI remains well inside contraction territory as the sector continues to suffer in the face of global trade tensions, an autos slowdown and lingering uncertainty. That said, some encouragement can be taken from the fact that the rate of decline in new orders eased for a third month running and future expectations returned – albeit only just – to positive territory.’
Euro Pound Outlook: Will Higher than Forecast German Retail Sales Buoy EUR?
Looking ahead to Tuesday, the Euro (EUR) could rise against Sterling (GBP) following the release of Germany’s retail sales.
If data shows German retail sales have jumped further than forecast in June, it could buoy the single currency.
Meanwhile, the Pound could rise following the release of June’s UK construction PMI.
If the UK’s construction PMI rises above the 50-mark, it could cause the Euro Pound (EUR/GBP) exchange rate to slide.