- Pound (GBP) is falling after gains
- Industry data showed private sector hiring intentions slowed
- Euro (EUR) is rising as attention turns to the Trump-Putin summit
- German ZEW economic sentiment data tomorrow
The Pound-Euro (GBP/EUR) exchange rate is modestly lower at the start of the week. The pair rose 0.8% in the previous week, settling on Friday at €1.1555. It traded between €1.1435 and €1.1560. At 13:00, GBP/EUR trades -0.04% at €1.1551.
The pound is edging lower after industry data showing a weakness in the UK labour market. According to a survey, the Chartered Institute of Personnel and Development’s hiring intentions by British businesses have fallen to their weakest level since the pandemic, and starting pay was rising at the slowest pace in years.
The Bank of England is watching the jobs market closely. In a recent CIPD survey, 57% of private sector employers said they plan to recruit staff over the next three months, which was the lowest since 2021. The professional body set higher employer social security charges introduced by the government, and the rising minimum wage are hurting jobs, particularly in hospitality.
This latest report comes ahead of official jobs data tomorrow, which is likely to show that the jobless rate in the UK health study at 4.7% in the three months to June, close to a four-year high.
Bank of England policymakers will also be watching pay growth, inflation, and sticky inflation levels.
The EUR is rising against the pound but falling against the USD. A major quiet economic calendar and as Investors look towards the Trump-Putin summit, which is expected to take place in Alaska at the end of the week. The two leaders are expected to discuss the future of Ukraine; however, President Zelenskyy of Ukraine will not be present. Donald Trump’s talk of land swaps has also set off alarm bells in Ukraine and across Europe amid fears that trade will be easily manipulated by Putin.
Looking at the economic calendar, attention will turn towards the ZEW German economic sentiment figures due tomorrow, which are expected to show that the area is slightly improved.