EUR GBP Higher as German Employment Improves

The EUR GBP exchange rate was 0.37% higher on Tuesday and back above the 0.8500 level after Germany’s unemployment rate improved. Analysts had expected a reading of -25k but the actual number was -34k. Meanwhile Europe and the UK are posturing on virus rules after the emergence of the latest virus.

The EUR v GBP trades at 0.810 with resistance ahead at 0.8580.

German unemployment boost as companies filled order backlog

German unemployment claims dropped by more than expected in November, the Federal Employment Agency said on Tuesday.

Jobless claims fell by 34,000 on the month after a decline of 40,000 in October. Economists surveyed by The Wall Street Journal had predicted a decline of 23,500.

The latest unemployment rate was seen at 5.3% in November, down from 5.4% in October and below the forecast of 5.4% of economists surveyed. Hiring was boosted as employers moved to fill a backlog of work orders. The number of job vacancies stood at 808,000 in November, up 208,000 on the year, the agency said.

Traders are maybe getting ahead of themselves as Angela Merkel and her successor meet with state leaders today to discuss new covid measures.

The videocall was set to take place after the constitutional court delivered a ruling on the “emergency brake” law deployed last year. The top court has insisted that the constitution was not breached so that will be a green light for the leaders to impose new restrictions.

The incoming chancellor, Olaf Scholz, has said he backs mandatory jabs by February and that could be a signal of strict curbs until then. Scholz will be sworn in as chancellor next week after his Social Democrats sealed a coalition deal with the Greens and Free Democrats.

Northern Ireland economy outperforms the rest of UK

Northern Ireland’s economy has recovered from the pandemic, with the help of the protocol, according to the ONS.

New figures from the Office for National Statistics (ONS) on Monday said that Northern Ireland’s economic output in the third quarter was only 0.3% below the final quarter of 2019. The province performed better than any other region in the UK.

The figures will put pressure on the UK government to find a solution to the argument with the EU, however Norther Ireland’s economy was also buffered by a large public sector.

“Northern Ireland has a large public sector which has helped to protect its economy during the pandemic,” Richard Holt, an economist at Oxford Economics, told the FT.

Meanwhile, Prime Minister Boris Johnson has rejected advice that citizens should reduce their socializing in December. The country has only logged 14 cases of the new variant but hysteria reigns despite no evidence of its severity.

Dr Jenny Harries, chief executive of the UK’s Health Security Agency, said the public can do their bit by “not socialising when we don’t particularly need to”.

However, the prime minister later said there was no need to “change the overall guidance about how people should be living their lives”.

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