- Pound (GBP) holds steady
- UK labour market data in focus
- Euro (EUR) slips eases on declining inflation outlook
- Eurozone final CPI reading
The Pound Euro (GBP/EUR) exchange rate is treading water after a flat finish in the previous session. The pair settled just -0.02% lower on Monday at €1.1714 after trading in a very tight range. At 08:45 UTC, GBP/EUR trades +0.02% at €1.1717.
The Pound barely moved on Monday. Whilst improving covid cases helped underpin Sterling, uncertainty over Brexit and the government’s next moves dragged on demand for the currency.
Businesses warned the government that they must stoop raising taxes and instead offer more support against the challenges of Brexit, covid and climate change. According to the Confederation of British Industry, the lack of detail and pace from the government on some of the countries big economic decisions are among the largest worries for businesses.
The survey comes ahead of Chancellor Sunak’s spending plan next month.
Today, the focus will be back on the UK economic calendar and the release of UK labour market data. The unemployment rate is expected to tick lower in the three months to July to 4.6%. However, this is still being masked by the furlough scheme which is due to start winding down at the end of the month. As employers have to start contributing more to furloughed employees the unemployment rate could tick up.
The Euro trashed lower in the previous session after Isabel Schnabel a German member of the European Bank said that she expects inflation will decrease as soon as next year. Her comments come as German consumer prices reached 3.4% in August the highest level since 2008. The Bundesbank says that inflation could rise as high as 5% later this year before it is expected to slow next year.
Today the final release of Eurozone CPI data inflation data is due to be released. Expectations are for CPI to confirm 1.9%, up from 1.7% in July. Month on month inflation is expected to rise 0.2% a slower pace than last week’s 0.3%.