- Pound (GBP) falls for a third straight day
- UK wage growth slows
- Euro (EUR) rises despite German inflation cooling
- Eurozone retail sales are due
The Pound Euro (GBP/EUR) exchange rate is falling for a third straight session. The pair fell -0.22% in the previous session, settling on Tuesday at €1.1491 and trading in a range between €1.1488 – €1.1524. At 09:00 UTC, GBP/EUR trades -0.05% at €1.1485.
The pound is heading lower again on Wednesday amid signs that the UK jobs market is cooling further. According to the Recruitment and Employment Confederation, a trade body for recruiters, the decline in hiring by UK employers continued, although at a slower pace.
The REC survey also showed that growth in starting salaries was at the slowest pace since March 2021 and was also below the rates seen in the run up to the pandemic.
The data comes after official employment surveys had shown the UK wage growth rose at a record pace just a few months ago.
The Bank of England has cited record wage growth as a cause for inflationary pressures and the reason to keep rates high for longer.
Attention will now turn to a speech by Bank of England governor Andrew Bailey, and investors will be watching closely for any clues over the outlook for UK interest rates and the UK economy.
Any hints from the chief of the central bank that interest rate hikes are done could pull the pound lower.
The euro is rising despite more weak data from the region. German inflation cooled to 3.8% year on year in September, down from in October down from 4.5% in September on a monthly basis, inflation was 0. The fall in inflation comes as the German economy is stalling.
Data yesterday showed that German industrial production fell significantly more than expected, down 1.1% month on month in September after falling 0.2% in August. This comes after German PMI data earlier last week showed that the economy was contracting and raised fears of a recession in the final quarter of the year.
Attention will now turn to eurozone retail sales, which are expected to fall 0.2% month on month after falling 1.2% in August. Weak retail sales come as consumers and households struggle with 4% interest rates and high inflation. Weaker-than-expected sales could drag the euro lower.
