- Pound (GBP) is flat amid a quiet economic calendar
- UK unemployment rose to 4.3%
- Euro (EUR) looks to GDP data
- ECB is still on track to cut in June
The Pound Euro (GBP/EUR) exchange rate is holding steady after a flat finish yesterday. The pair ended flat in the previous session, settling on Tuesday at €1.1637 and trading in a range between €1.1609 and €1.1645. At 10:00 UTC, GBP/EUR trades -0.06% at €1.1630.
The pound is holding steady in a quiet day for the UK economic calendar.
Investors are still digesting yesterday’s jobs data, which gave some mixed signals but broadly pointed to the Bank of England being on track to cut interest rates in the coming months.
While unemployment rose to 4.3% the highest level since July 2023, wage growth also proved to be sticky.
Bank of England chief economist Huw Pill highlighted that the labor market remained tight by historical standards but said the central bank could still consider cutting rates over the summer.
The market kept its bets for future Bank of England rate cuts largely unchanged following the data and Pill comments, with the chances of a first-rate cut in June priced in at around 50%.
The data came after the Bank of England’s rate decision last week, in which the central bank signaled that it could start cutting interest rates as early as next month.
The euro is holding steady as investors look ahead to eurozone GDP data, which is due shortly. This is the second reading, so it is not expected to be as market-moving as the preliminary print. Economists expect the second reading to confirm the preliminary print of 0.3% Q1 growth after recovering from a 0-.1% contraction in the final quater of last year.
The data comes amid increasing signs that the eurozone economy is recovering from its recent downturn. This has helped support the euro, even as the ECB has signalled that it will start cutting interest rates in June.
An upward revision to the Q1 GDP figures could help lift the euro higher. Industrial production figures are also being released, and these are expected to fall by 0.2%; however, this would be unsurprising given the ongoing contraction in manufacturing PMI figures.
