By Simon Eastman
With UK jobs data expected with caution, following the end of the furlough scheme, traders watched with a keen eye as we had unemployment data and average earnings figures yesterday. Given the scheme has only just finished, the likely knock-on effect is more likely to be seen next month, but it was still a welcome sight to see the unemployment figure come out at 4.5 percent, in line with expectations. The good news was average earnings figures which showed an improvement on the forecast, leading to a decent bounce for the pound across the board.
GBP/EUR managed to rally all the way up to the current resistance ceiling as we saw a weaker euro following some poor EU data, in the form of EU and German ZEW economic sentiment surveys which all fell sharply from the forecasts. The two speeches by ECB members Lane and Elderson clearly didn’t help to bolster the single currency as we saw further upside movement on USD/EUR as the single currency weakness continued.
As the data flows ran dry, GBP/EUR hit the ceiling and bounced back down, further testing it later in the days trade. Cable stayed rangebound within a half cent movement, gravitating around key resistance levels too. With sentiment seemingly with the safer haven dollar now, riskier currencies, like the pound are having gains subdued. With that in mind and the memories of the previous times we were at these levels against the single currency, for anyone with a requirement coming this year, now could be the time to strike the iron.
Today we see another busy day of data, with UK industrial and manufacturing production figures, trade balance and GDP. Germany releases inflation figures, whilst the EU release industrial production. After lunch, the US release their inflation readings plus FOMC minutes from the last policy meeting. Throw in a speech by BoE member Jon Cunliffe and we have a decent mix to move the markets.
If you like the current rates and want to take the risk out of them dropping please give us a call today and speak to one of the dedicated currency consultants about the options available to book your currency.