- Pound (GBP) rises ahead of jobs data
- Tory leadership continues
- Euro (EUR) slips ahead of inflation data
- Energy security concerns linger
The Pound Euro (GBP/EUR) exchange rate is rising for a second straight day. The pair rose 0.27% at the start of the week settling on Monday at €1.1778, after trading in a range between €1.1752 – €1.1826. At 08:45 UTC, GBP/EUR trades +0.08% at €1.1788.
The pound surged higher in the previous session amid a broad upbeat mood in the market as investors brushed off the hottest day of the year kept buying the pound.
There was no particularly good news that helped the pound higher instead investors are looking ahead to a busy week on the economic calendar. Today UK jobs data will be in focus and is expected to show that the unemployment rate in the UK held steady at 3.8% in the three months to May close to the lowest level in 60 years, after an unexpected rise last month.
Tightness in the labor market shows no signs of disappearing and this is adding pressure to wages. Average wages excluding bonuses is expected to rise 4.3% in the three months to May. Average wages including bonuses is expected to hold steady to 6.8%. The data comes ahead of inflation data due on Wednesday.
Any signs of the UK labour market weakening as recession fears mount could hurt demand for the pound.
The euro came under pressure in the previous session as concerns over gas security in Europe lingered.
The Nord Stream 1 pipeline which takes gas from Russia to Germany went offline last week for annual repairs. Fears are rising that Russia won’t switch the gas supply back on after the 10 day period.
Today attention will turn back to the eurozone economic calendar with the release of Eurozone inflation data, which is expected to confirm the record high preliminary reading of 8.6% year on year.
The data comes ahead of the ECB rate decision later in the week where the ECB is expected to hike rates by 25 basis points.