- Pound (GBP) set for mild weekly gains
- UK economy added 365,000 job in June
- Euro (EUR) slips ahead of data
- Eurozone CPI inflation numbers due
The Pound Euro (GBP/EUR) exchange rate is heading higher on Friday. The pair settled 0.02% lower on Thursday at €1.1703 after trading within a familiar range. At 05:45 UTC, GBP/EUR trades +0.09% at €1.715. The pair is set to gain just 0.1% across the week.
The Pound found support from upbeat UK labour market data. The number of employees on payrolls surged in June by 365,000, the highest amount since the start of the covid pandemic. Average wages also surged to 7.3%, well up from the 5.7% previously reported. The elevated wage growth number comes against a backdrop of concerns over surging inflation.
Meanwhile the headline unemployment figure unexpectedly ticked higher to 4.8% in the three months to May, up from 4.7%. This level remains artificially low as the government’s furlough scheme props up the labour market. The support is due to come to an end in Autumn which will almost certainly result in the unemployment rate ticking higher.
Following the data Bank of England official Michael Saunders said that the BoE could stop its bond-buying purchases sooner owing to the rising inflation. He as the second BoE official in two days to hint towards tapering bond purchases.
There is no high impacting data due to be released today. Investors could continue watching covid numbers as new dsily covid cases in the UK almost reaches 50,000.
The Euro held its ground versus the Pound despite a quiet day on the economic calendar on Thursday.
Things could still pick up heading towards the weekend as Eurozone inflation data is due to be released. Analysts expect inflation, as measured by the consumer price index to rise 0.3% month on month in June. On an annual basis, inflation is expected to rise 1.9%, just down slightly from May’s 2%.
The ECB just recently changed its price stability strategy lifting its inflation target to 2% whilst allowing an overshoot if necessary