GBP/EUR: Pound Rises vs Euro Despite Record-Low German Unemployment
  • German Factory orders jump 2.9% MoM Oct
  • Euro (EUR) set for 1.6% gains across the week
  • US Dollar (USD) looks to NFP 468l jobs forecast
  • Lead indicators have been disappointing

The Euro US Dollar (EUR/USD) exchange rate is extending gains for a fourth straight session on Friday. The pair settled +0.2% higher on Thursday at US$1.2140. At 07:15 UTC, EUR/USD trades +0.12 at US$1.2157. The pair is on track to gain +1.6% across the week, its third consecutive week of gains.

Vaccine optimism continues to boost the Euro, despite news that Pfizer will slash its roll out time for the covid vaccine owing to logistical obstacles.

German Factory orders supported the common currency, as data revealed that orders rose for a sixth straight month in October, passing pre-pandemic levels. The data highlights the manufacturing sector’s resilience in the pandemic.

Factory orders rose 2.9% month on month in October, nearly double the 1.5% that analysts predicted. Germany has benefited from its large manufacturing sector which it has adapted to keep producing goods through the crisis.

This is good news for Germany, which has extended lockdown restrictions until January. The Bundesbank has still warned that Germany’s economy could stagnate or contract in the final three months of the year.

There is no more Eurozone data due today, instead sentiment will drive the Euro. Looking ahead the ECB monetary policy meeting next week will start to draw into focus. The ECB are expected to ease policy further.

Attention will now turn to the US non-farm payroll data. Analyst are expecting to see a more modest gain in non-farm payrolls in November following on from a solid rise in jobs added in October.

Expectations are for 468,000 jobs added in November after 638,000 in the previous month. The unemployment rate is expected to edge down to 6.8% from 6.9%.

Leading indicators this month have been disappointing, with the ADP payroll coming in steeply lower and ISM manufacturing PMI Employment subcomponent also weakening, although the ISM services PMI employment component edged higher.