- Pound (GBP) boosted by Brexit progress & vaccine news
- Redundancies hit highest level on record in Q3
- Euro (EUR) under pressure after dismal ZEW investor sentiment figures
- ECB President Christine Lagarde to speak.
The Pound Euro (GBP/EUR) exchange rate is ticking mildly lower after two straight days of gains. The pair surged higher in the previous session, settling +0.8% at €1.1230, a good 100 pipis off the low of the day and some 20 pips off the high. At 05:15 UTC, GBP/EUR trades.
Upbeat news over a covid vaccine combined with rumours of progress in the latest Brexit negotiations boosted the Pound, helping it to shrug off gloomy labour market data.
UK unemployment hit a 4 year high at 4.8% in the three months to September. The jump in unemployment from 4.5% in August was a reflection of the highest number of redundancies being made on record. 314,000 people were made redundant in the three-month period, highlighting the impact of the covid pandemic on the labour market, after the Chancellor’s furlough extension scheme has come too late for many.
Promising news surrounding a covid vaccine has been particularly well received by Pound investors, given that the UK is one of the worst hit countries in Europe, with rates of infection and deaths climbing as the UK continues its lockdown 2.0.
Brexit will remain in focus. The latest rumours suggest that progress is being made. A warning from President Elect Joe Biden to Boris Johnson over the Northern Ireland Good Friday Agreement could be jut the nudge in the right direction.
The Euro traded on the back foot following dismal ZEW German sentiment data. Data revealed that German investor morale declined by more than expected in November as a second wave of covid and a national lockdown made the outlook more uncertain. Investors economic sentiment tumbled to 39 down from 56.1 in October, missing forecasts of 41.7. Fears are growing that the Eurozone’s largest economy could head back into recession.
The Eurozone economic calendar is light today with a speech by ECB President Christine Lagarde being the central focus.