Pound-Euro could come under pressure if UK jobs data weakens BoE expectations, while stronger German sentiment may offer the Euro support.
The Pound Euro (GBP/EUR) exchange rate climbed on Monday, hitting a two-week high, as strength in the US Dollar (USD) weighed on the single currency.
At the time of writing, GBP/EUR was trading at €1.1681, up 0.2% on the day.
Pound to Euro (GBP/EUR): 1.168302 (+0.17%)
Euro to Dollar (EUR/USD): 1.15406 (-0.50%)
DAILY RECAP:
The Euro (EUR) came under pressure on Monday as the common currency suffered from its strong negative correlation with the US Dollar.
USD firmed ahead of the Federal Reserve’s interest rate decision later in the week, where the US central bank is expected to raise rates from 3.75% to 4%.
A lack of Eurozone economic data left the Euro struggling to attract support, exposing the currency to losses.
Meanwhile, the Pound (GBP) traded without a clear direction on Monday as GBP investors opted to wait on the sidelines ahead of a busy week.
While UK data was absent from the calendar on Monday, there was plenty on the docket for the rest of the week’s trade.
The UK’s latest labour market overview, consumer price index, Bank of England (BoE) rate decision and retail sales figures were all on the horizon.
This left GBP investors hesitant to place aggressive bets on Monday.
Near-Term GBP/EUR Forecast: Sterling to Stumble on UK Jobs Data?
Looking forward, Tuesday’s session kicks off with the UK’s latest jobs data.
Markets expect British unemployment to have risen in the three months to July, from 4.9% to 5%. Meanwhile, wage growth (including bonuses) is forecast to have cooled.
If the latest data points to a softening labour market, it could pressure the Pound – particularly ahead of the Bank of England interest rate decision on Thursday.
As for the Euro, Germany’s latest ZEW economic sentiment index could support the single currency on Tuesday. Morale in the Eurozone’s largest economy is anticipated to have improved for the fifth consecutive month in September to hit a seven-month high.
Our currency coverage draws on live market data, official economic releases and published bank research.
