EUR/GBP continues its decline, extending losses to around 0.8250 following the release of the UK employment data. The Pound Sterling (GBP) gained strength as the UK labor market showed resilience, with the unemployment rate holding steady at 4.3% and jobless claims falling unexpectedly. However, employment growth slowed, adding only 173,000 new workers, down from the previous month’s 253,000.
Traders are now focusing on the upcoming UK inflation data on Wednesday, with expectations that the Bank of England (BoE) will hold rates steady due to persistent inflation pressures. The BoE is expected to maintain its current stance with an eight-to-one vote split in favor of keeping interest rates unchanged.
European Central Bank (ECB) President Christine Lagarde also sparked speculation that the ECB could further ease policy if inflation remains subdued. Her comments suggest a shift away from the previously restrictive monetary stance, indicating potential rate cuts if the disinflation trend continues.
Despite positive PMI data from the Eurozone, economic concerns persist, weighing on market sentiment and continuing to limit the Euro’s potential against the Pound.s persist about the economic slowdown, with Services PMI data still in contraction territory. European concerns are growing as a result of weak investor sentiment, especially in Germany, where mid-tier economic data on business climate and current assessments will be watched closely in the coming days for clues about future policy direction. These factors continue to weigh on the Euro and sustain selling pressure against the GBP.
