Pound Euro (GBP/EUR) Exchange Rate Strengthens following Unemployment Drop
The Pound Euro (GBP/EUR) exchange rate strengthened slightly on Tuesday following the release of the UK’s latest unemployment data, which showed an unexpected but welcome dip.
The unemployment rate for June was forecast to remain steady at 4.2%, but dropped to 4%, sparking some GBP gains.
However, some lacklustre wage data capped the Pound’s uptrend, with growth in average earnings excluding bonuses dropping from 2.8% to 2.7%.
The Euro’s stagnation was also responsible for the bolstered GBP/EUR rate, with the Eurozone’s GDP for the second quarter failing to prompt movement in the common currency as the currency crisis in Turkey keeps the Euro under pressure.
Pound (GBP) Exchange Rates Slip Following Uninspiring Inflation Rate Figures
The UK’s latest inflation rate figures were published this morning, with a meagre increase from 2.4% to 2.5% failing to stoke markets in favour of the Pound (GBP).
Sterling has actually slipped slightly since the report’s release, with economists deeming the increase insufficient to trigger the Bank of England’s (BoE) next rate hike.
In the current climate of Brexit uncertainty interest rates aren’t likely to increase for some time, but accelerating price pressures may have prompted action sooner rather than later.
Euro (EUR) Exchange Rates Skittish amid Lira Currency Crisis
Euro (EUR) exchange rates remain keenly reliant on developments in Turkey. As many Eurozone banks have invested in Turkey the risk of contagion is keeping the Euro under pressure.
Despite the Lira rallying considerably today and yesterday, the situation remains uncertain, with Turkey’s government responding to recently-imposed US tariffs with tariffs of their own.
Economists still forecast that the state of affairs may worsen before it improves, leaving Euro investors to watch warily as developments unfold.
With no noteworthy Eurozone data due for publication today, the common currency will continue to be reliant on developments abroad.
Pound Euro (GBP/EUR) Exchange Rate Forecast: UK Retail Sales to Boost Sterling?
Looking ahead, the Pound Euro (GBP/EUR) exchange rate may get a leg up tomorrow morning when the UK releases retail sales figures for July.
These are expected to show an uptick in consumer spending, although the Pound may struggle to turn this data into gains unless the increases are substantial.
The Eurozone releases its balance of trade figures tomorrow as well, which are expected to show an increase in the bloc’s trade surplus from June.
This may aid the Euro somewhat, but it is likely the GBP/EUR exchange rate will remain muted tomorrow barring major geopolitical developments.