- Pound (GBP) falls on mixed employment data
- UK inflation figures in focus
- Euro (EUR) showed resilience on improving vaccine outlook
- ECB rate decision on Thursday
The Pound Euro (GBP/EUR) exchange rate is slipping lower for a second consecutive day. The pair settled -0.3% lower on Tuesday at €1.1578 snapping a three session winning streak. At 05:15 UTC, GBP/EUR trades -0.04% at €1.1574.
The Pound came under pressure in the previous session after a mixed bag for UK jobs data. On the one hand, the UK unemployment rate unexpectedly ticked lower to 4.9% in the three months to February, down from 5% in January. This was below the 5.1% that analysts had penciled in. However, the improved unemployment rate is more likely associated to more people exiting the jobs market altogether as the inactivity rate rose by 0.2%.
On the plus side, job vacancies were on the rise is March as business prepared to reopen which bodes well for coming months.
The Bank of England expects the unemployment rate for peak at around 6.5% when the government withdraws the jobs retention scheme in the summer. This is an improvement from a previously expected 7.5%.
Looking ahead UK inflation data, as measured by the consumer price index will be in focus. Expectations are for inflation in March to start to tick higher. Month on month CPI is forecast at 0.3%, up from 0.1% in February. On an annual basis, CPI is due to rise to 0.8% up from 0.4%.
Bank of England Governor Andrew Bailey is also due to speak.
The Euro showed more resilience in the previous session as the outlook for the covid vaccine programme in the region improved. Reports that the EU secured an additional 100 million vaccines from Pfizer means that there is a better chance of the economies reopening sooner rather than later.
There is no Eurozone data due to be released. Investors will look ahead to the European Central Bank monetary policy announcement on Thursday. No change to policy is expected.