The British pound is lower against the euro on Tuesday.
- Russia announces first approval of coronavirus vaccine
- UK unemployment claims jump
- Tomorrow: UK GDP
- German ZEW reports leap in German investor confidence
GBP/EUR washigherby 34 pips (-0.28%) at 1.1975as of 3pm GMT. This week so far, the pound is up +0.38% over the euro.
An early attempt beyond 1.115 failed and the currency pair slid to just above 1.11 before bouncing, then turning lower to finish near lows of the day. Yesterday marked a third daily gain for the exchange rate of +0.54%.
GBP: Jump in UK jobless claims hits pound
The pound was under pressure after data from the ONS showed a 94,400 spike in jobless claims in July after a drop of 28,100 in June. The jump in claims overshadowed the official unemployment rate falling to 3.9% from 4.2% in the three months through June. Put altogether the rise in jobless claims throughout Q” is the biggest since 2009, even with the government furlough program in place.
Tomorrow the UK releases second quarter GDP data where a catastrophic -20.2% decline is expected across the quarter. The reversal in GDPis exaggerated by the fact the government is paying people to stay at home and not be productive.
EUR: Euro bolstered by Russia approved vaccine
There were sharp moves up in European stock markets, with some strength in the euro currency after Russia approved a coronavirus vaccine and German economic data came in hotter than expected.
Russia vaccine announcement was met with optimism across markets but with a healthy degree of scepticism from scientists in other countries, who appear to be a step behind Russia in testing and producing their own vaccine.
Russia’s President Putin announced in a video conference today: “This morning, for the first time in the world, a vaccine against the new coronavirus was registered.”
The Russian President said one of his daughters had taken the vaccine – and simultaneously argued the point that the vaccine had been through trials to approve its safety and effectiveness. Russian health authorities announced medical workers, teachers and other risk groups will be the first to receive the vaccine.
