The Euro keeps treading water within a broadly 20-pip range against the British Pound (GBP). The pair retreated from session highs at 0.8713, amid upbeat UK unemployment figures, and remains moving without a clear bias, with downside attempts contained above 0.8700 and bulls limited below 0.8720.
Data released by National Statistics on Tuesday revealed that the UK Unemployment Rate fell to 4.9% in the three months to February, from 5.2% in the previous period, and against market expectations of a steady 5.2% reading.
The Claimant Count Change, however, increased by 26.8K in March, from 17.1K in February, well above the 21.4K expected, which suggests that the jobless rate might rise again next month. Average Earnings Excluding Bonus have eased to 3.6% from 3.8% in January, yet above the 3.5% anticipated by the market consensus.
Eurozone’s economic sentiment is likely to deteriorate further
In Europe, the focus is on the Eurozone and the German ZEW Economic Sentiment Survey, due later on Tuesday. ZEW figures are expected to show further deterioration in April, highlighting the negative impact of the Middle East war and the higher energy costs on the Eurozone’s economic outlook.
Before that, European Central Bank (ECB) Vice President Luis de Guindos is expected to speak at an event in Madrid, where he may provide further insight into the timing of the next monetary policy tightening move.
Investors remain cautious, with one eye on the US-Iran peace talks. A seizure of an Iranian vessel in the Gulf of Oman by the US military threatened to derail the peace process on Monday, but Tehran seems to be sending a delegation to Pakistan for the next round of talks scheduled for this Tuesday.
Markets remain hopeful of a swift end to the war, which is keeping the Euro and the Pound near recent highs against the US Dollar.
Economic Indicator
ILO Unemployment Rate (3M)
The ILO Unemployment Rate released by the UK Office for National Statistics is the number of unemployed workers divided by the total civilian labor force. It is a leading indicator for the UK Economy. If the rate goes up, it indicates a lack of expansion within the UK labor market. As a result, a rise leads to a weakening of the UK economy. Generally, a decrease of the figure is seen as bullish for the Pound Sterling (GBP), while an increase is seen as bearish.
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Economic Indicator
Claimant Count Change
The Claimant Count Change released by the UK Office for National Statistics presents the change in the number of unemployed people in the UK claiming benefits. There is a tendency for the metric to influence GBP volatility. Usually, a rise in the indicator has negative implications for consumer spending and economic growth. Generally, a high reading is seen as bearish for the Pound Sterling (GBP), while a low reading is seen as bullish.
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Source: https://www.fxstreet.com/news/eur-gbp-keeps-hovering-below-08720-as-uk-employment-data-supports-pound-202604210644
