- Pound (GBP) was boosted by strong jobs data
- BoE interest rate decision tomorrow
- Euro (EUR) fall after German economic confidence tumbles
- Peace -talks remain in focus
The Pound Euro (GBP/EUR) exchange rate is holding steady on Wednesday after booking gains in the previous session. The pair rose +0.19% on Tuesday, settling at €1.1902 after trading a 100 pip range between €1.1825 – €1.1925. At 05:45 UTC, GBP/EUR trades -0.14% at €1.1930.
The Pound strengthened in the previous session after the UK unemployment level fell below its pre-pandemic rate in the three months to January to 3.9%. This was down from 4.1% in December and ahead of the 4% forecast.
Meanwhile, the number of job vacancies hit a fresh record high of 1.318 million, mainly due to the vast number of people, which left the labor market across the pandemic. Wages rose to 4.8% year on year, ahead of the 4.6% forecast, as employees needed to raise packages to attract talent. Rising wages add inflationary pressure in an environment that is already suffering from surging prices.
The BoE interest rate decision is tomorrow, and the BoE is expected to hike rates in a bid to cool inflation which sits at 5.5%, a 30 year high. This would be the third BoE interest rate rise in 3 meetings.
The Euro traded under pressure as investors weighed up cautious optimism coming from ongoing Russia Ukraine cease-fire talks and weaker than expected German economic confidence. Data revealed the considerable impact that the Russian invasion has had on economic sentiment, which dropped to -39.3, down from 54.3 in its largest drop on record.
The 93.6 point decline was worse than the fall seen at the beginning of the pandemic amid the realization that the Ukraine invasion and sanctions against Russia are set to dampen the German economic outlook significantly.
There is no high impacting eurozone data today. Attention will remain on Russia Ukraine peace talks.
