EURGBP Higher on the Week Despite UK Jobs Improvement

The EURGBP exchange rate was trading 0.10% higher on Tuesday despite a dip in the UK unemployment rate to 5%. The UK is also seeking to cool the latest argument with the EU, which has seen the bloc threatening to stop vaccine exports to the UK.

EURGBP trades at 0.8615 with UK inflation figures for February coming tomorrow.

UK Unemployment Sees a Surprise Move to 5%

The UK unemployment rate saw a surprise dip to 5%, according to the Office for National Statistics (ONS), which was lower than the 5.2% analysts had expected. The total unemployment level is now up 360k compared to the November and January period of last year, before the coronavirus crisis hit. The ONS said that 123,000 of those jobs were lost in the hard-hit retail sector, while over 60% of the total figure was in the under 25s.

The government’s furlough scheme, which was recently extended to September, has helped to mask the damage and keep 4.7million workers on the books.

The UK International Trade Secretary Liz Truss said on Tuesday that the government is set to create four regional hubs in Belfast, Cardiff, Darlington and Edinburgh; in an attempt to support regional businesses and boost trade.

“I’m determined to use UK trade policy to benefit every part of the UK. These trade and investment hubs will help this country to an export and jobs-led recovery,” Truss said.

Central Bank Speeches Before Inflation

The market will now await speeches from the BoE Governor Andrew Bailey and Deputy Governor Jon Cunliffe today, while later in the day, Federal Reserve Chair Jerome Powell and US Treasury Secretary Janet Yellen will testify before the House Financial Services Committee. The central bankers may give some insight into the recovery and tapering picture in the US and UK.

Governor Bailey’s remarks will come before tomorrow’s inflation release for the British Pound, and this will be in the back of traders’ minds. The UK number is set to move higher to 0.8%, with central banks stating targets of 2%.

The UK is seeking to cool an argument with the European Union over exports of the controversial AstraZeneca vaccine. The EU has threatened to block exports to the UK, which could slow the country’s vaccine rollout by two months.

The EURGBP has found support near the 0.8550 level and is moving higher for a third day with the 0.8700 level now in the pair’s sight. The euro is likely to get a further boost if the Bank of England speeches deliver a more cautious tone, while a dip in inflation tomorrow could also boost the euro to pound rate.

Get in touch ahead of tomorrow’s data release to see how your upcoming currency exchange is likely to be impacted by a change in GBPEUR rates.

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