- Pound (GBP) rises despite signs of the labour market cooling
- UK pay growth slowed to a 5-month low
- Euro (EUR) falls gains last week
- Eurozone investor confidence dropped to -15.4
The Pound Euro (GBP/EUR) exchange rate is rising on Monday, after losses last week. The pair fell 0.38% in the previous week, settling on Friday at €1.1836 and trading in a range between €1.1835 and €1.1899. At 11:00 UTC, GBP/EUR trades +0.04% at €1.1840.
The pound is inching higher on Monday after losses last week and despite industry data suggesting that the UK labour market cooled last month. According to a monthly report on jobs from the Recruitment and Employment Confederation, job placements fell sharply, and pay growth slowed, which could boost the case for interest rate cuts from the Bank of England.
Job placements fell at the fastest pace in five months, and starting pay growth for permanent staff also dropped to a five-month low, marking one of the weakest readings since early 2021.
The data comes ahead of tomorrow’s UK labor market figures, which are expected to show that unemployment ticked lower to 4.1% from 4.1% and average earnings also weakened to 4.1%.
The BoE is widely expected to leave interest rates unchanged until the November meeting after reducing rates by 25 basis points in August.
Meanwhile, the euro is heading modestly lower after disappointing investor sentiment data. Eurozone Sentix investor confidence fell to -15.4 in September, dropping from 13.9 in August. This was significantly below the expected -11.7 and marks the third straight month of declines.
Germany’s outlook painted an even bleaker picture, with investor confidence in the eurozone’s largest economy plunging to -34.7 from -31.1, its lowest point since October 2022.
The data highlights broader eurozone concerns that the region is moving towards a recession, largely driven by Germany’s economic struggles. The prospect of looser monetary policy is now the key hope for market participants ahead of the ECB interest rate decision this week.
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