The Euro edged higher against the Pound despite the release of positive jobs data out of the UK and worse-than-expected Eurozone industrial production data.
Following the release of data which showed that the UK’s first quarter jobless rate fell from 6.9% to 6.8% the GBP/EUR pairing breached the 1.23 level. The pair then fell as a separate report showed that UK average earnings came in below forecast.
According to the UK’s Office for National Statistics the number of UK citizens in work increased by 283,000 to a record high of 30.4 million. The increase was the largest seen since records began in 1971. The number of people out of work fell by 133,000 to bring the total number unemployed to 2.21 million.
“As the recovery takes hold, more people are able to get a job or set up their own business and become the employers of tomorrow. Each person and every person who has made a new start or hired someone new is helping to make Britain a more prosperous and confident place to be. We will continue to support those in and out of work who want to get on and fulfil their ambitions for a more secure future,” said Esther McVey the governments Minister for Employment.
A separate report took some of the shine off of the jobs figures.
Average earnings excluding bonuses increased less than inflation to 1.3% disappointing economists who had forecast a rise to 1.4%. Earnings including bonuses increased by 1.7% below expectations for a figure of 2.1%.
The Euro to GBP exchange rate is currently trading around 0.8158.
The Euro meanwhile came under some pressure from data which showed that industrial production in the Eurozone fell by -0.3% month on month and unexpectedly declined by -0.1% year on year. Economists had been forecasting a softening on yearly production to 1%.
Sterling could recover ground later in the session if comments made by Mark Carney offer support to the currency. Carney will present the Banks forecasts at a press conference at 10:30 a.m. Economists are expecting the Bank to raise its growth forecasts for the coming year.
Euro to Pound Update on 15/05/14
The Euro was back on the retreat against the Pound on Thursday after GDP data out of France and Germany highlighted the divergence of the Eurozone’s top two economies.
Data showed that the Frances GDP was stagnant in the first quarter at 0%. The figure disappointed economists who had been forecasting for growth of 0.2%. The cause for the fall was a decline in consumer spending as citizens remain wary over job losses and taxes.
A more positive report out of Germany did little to improve the market’s mood.
Data out of the region’s largest economy showed that GDP in Germany expanded by 0.8% in the first quarter, beating the expected figure of 0.7%. The yearly rate of GDP growth increased by 2.5%, more than the 2.2% increase forecast.
The single currency also remains under pressure amid heightened expectations that the European Central Bank could ease monetary policy as soon as next month, to stop inflation in the region from falling too low.