- Pound (GBP) falls, extending last week’s losses
- UK labour market shows signs of cooling
- Euro (EUR) rises further as sentiment improves
- Sentix investor sentiment jumps to -2.9 from -12.7
The Pound Euro (GBP/EUR) exchange is falling, extending losses from last week. The pair fell 1.6% in the previous week, settling on Friday at €1.1924. It traded in a range between €1.1874 and €1.2131. At 07:30 UTC, GBP/EUR is trading -0.05% at €1.1917.
The euro is heading higher, building on last week’s gains following stronger-than-expected eurozone investor sentiment.
Sentix investor confidence index jumped to -2.9 from -12.7 far exceeding market expectations of an increase to -10. This was the highest level since June last year. Meanwhile, the current situation index also improved from -25.5 to -21.8, and the expectations index jumped from 1 to 18, marking its third straight increase and the highest reading since July 2021.
Germany was a notable performer. Eyeing an impressive turnaround, investor confidence rose from -29.7 to -12.5, its best since April 2023.
Much of this optimism was rooted in expectations of increased investment in the EU defence sector and Germany’s infrastructure.
The fiscal U-turn announced in Germany last week helped lift European stocks to record highs and the euro to a five-month high against the US dollar and a monthly high against sterling.
The pound is under pressure at the start of the week amid more signs that the UK jobs market is cooling. Data in February showed that the pace of hiring slowed and starting salaries increased by the lowest amount in four years, underscoring firms’ concerns about higher employment costs and the weakening economy.
According to the Recruitment and Employment Confederation, starting pay growth for people hired in permanent roles was its lowest since February 2021, and appointments for permanent jobs declined for the 29th straight month.
Candidates for roles also increased by the number of vacancies fell for a 16th straight month.
The data comes as the Bank of England is expected to keep interest rates at 4.5% next week and ahead of the government’s spring statement at the end of the month.
