• Pound (GBP) under pressure after mixed UK jobs data
  • CPI & manufacturing & services PMI in focus
  • Euro (EUR) trades mixed as covid cases rose
  • EZ manufacturing and service sector PMI

The Pound Euro (GBP/EUR) exchange rate is edging lower on Wednesday, extending losses for a 4th straight session. The pair settled on Monday -0.1% at €1.1601 after slipping as low as €1.1567, a two-week low. At 05:15 UTC, GBP/EUR trades -0.15% at €1.1581.

The Pound came under pressure following a decidedly mixed jobs report. The unemployment rate unexpectedly ticked lower in the three months to January to 5%, down from 5.1% and beating forecasts of 5.2%.

The tick lower in unemployment came despite the lockdown conditions at the start of the year. Many businesses are tentatively getting back on their feet, except consumer services, which is being supported by the furlough scheme.  Unemployment is still expected to tick up to around 6.5% later in the year as furlough support comes to an end.

There were signs that companies were starting to ramp up hiring as 68000 new jobs were added, the third straight month of gain.

However, the claimant count was also notably high rising by 86,600, significantly higher than the 9000 expected.

Looking ahead today sees the release of inflation data, as measured by the consumer price index. Expectations are for consumer prices to rise 0.5% month on month in February, up from -0.2% in January. On an annual basis CPI is expected to tick higher to 0.8%, up from 0.7%. A strong reading could help the Pound regain some losses.

Manufacturing and service sector PMI data will also be in focus, both are expected to reveal

Euro traded mixed versus its major peers. Rising covid cases and tighter lockdown restrictions in Germany, France and the Netherlands is dragging on sentiment for the common currency. The longer the region is locked down, the slower the economic recovery and the deeper the economic scarring.

Manufacturing and service sector PMI data is due for the Eurozone today. Analysts expect manufacturing activity to continue to expand at an impressive rate. Meanwhile the contraction in services is expected to ease.