- Pound (GBP) falls for a fourth day
- UK unemployment rises to 4.4k
- Euro (EUR) is rising despite weak data
- German ZEW economic sentiment falls
The Pound Euro (GBP/EUR) exchange rate is falling, extending losses for a fourth straight session. The pair fell 0.10% in the previous session, settling on Monday at €1.1829. It traded in a range between €1.1799 and €1.1860. At 11:30 UTC GBP/EUR trades -0.05% lower at €1.1827.
The pound is falling following UK jobs data, which showed that the UK labour market weakend in November.
UK unemployment rose to 4.4% in the three months to November, up from 4.3%. Meanwhile, job vacancies fell to 812,000 in December, down from 813,000 in November, marking the 30th straight month of falling vacancies.
Payroll numbers also fell 47,000 in December, the largest fall since November 2020, and followed a revised -32,000 in November. The back-to-back declines follow the government’s Budget, which lifted the tax burden on employers.
Separately, wage growth accelerated to a six-month high, rising to 5.6%, excluding bonuses, in line with expectations. However, it’s worth noting that the wage strength is owing to a significant base effect after the low print this time last year.
Broadly speaking, the data pointed to a slowdown in the UK jobs market and supports the view that the Bank of England will cut interest rates in February by 25 basis points, with further one or two more rate cuts seen later the in the year.
Meanwhile, the euro is rising against the pound but falling against the US dollar amid concerns over US trade tariffs and mixed sentiment data.
The German ZEW economic sentiment index fell more than expected in January to 10.3, well below the 15.3 expected. This was down from 15.7 in December.
This was the lowest level of economic sentiment since May 2020, and the sharp drop indicates worsening fears surrounding the prospects for the German economy starting the new year.
