Pound euro exchange rate: GBP stable despite surprise fall in eurozone unemployment
Pound euro exchange rate: GBP is virtually unchanged from opening levels (Image: GETTY)
The pound is trading in a narrow range against the euro this morning as markets welcome the Eurozone’s latest labour figures. According to data published by the European statistics agency, Eurostat, unemployment in the bloc fell to 7.9 per cent in November, sliding from a downwardly revised 8 per cent in October. This was the lowest rate of unemployment since October 2008 and suggests that despite concerns of a slowdown in the Eurozone, the bloc’s labour market remains strong – something that is likely to salvage hopes of a rate hike from the European Central Bank (ECB) this year. At the same time, Brexit uncertainty continues to weigh on the pound this morning ahead of a parliamentary debate on Theresa May’s deal that is expected to run through the latter half of the week.
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Pound investors are likely to pay close attention to the debate as they look for any signals of which way next week’s vote may go, likely weakening Sterling if opposition to the PM’s withdrawal deal remains strong.
Ahead of the debate, Environment Secretary Michael Gove warned that the PM’s deal was the best on offer, and was scathing of his colleagues who were holding out for a better deal, comparing them to “mid-50s swingers holding out for Scarlett Johansson at the end night”.
Coming up later in the day will be an online Q&A session held by Bank of England (BoE) Governor, Mark Carney.
This could result in the pound euro exchange rate trending lower this afternoon if Mr Carney appears to strike a dovish tone against a backdrop of growing Brexit uncertainty.
Looking ahead to the end of the week, a spattering of UK economic data may drag attention away from Brexit, although it may also dampen the appeal of the pound if UK GDP fails to pick up in November.
Meanwhile the release of the minutes from the European Central Bank’s December policy meeting may influence movement in the euro on Thursday.
This may result in the euro to pound exchange rate weakening if there are signs that the recent slowdown in the Eurozone is causing some policymakers to rethink their plans for a rate hike in 2019.