- U.K Employment data
- ZEW Economic Sentiment
- BREXIT Optimism
EUR/GBP is showing signs of bottoming out of five-day’s lows, early Tuesday. The bounce back comes at the backdrop of mixed employment data from the U.K. The pair had edged low as optimism about BREXIT talks led to further strengthening in the sterling Pound.
The EUR/GBP pair has come under pressure as the Pound continues to strengthen across the board amidst improvements in economic data. However a strengthened EUR continues to curtail accelerated downside action.
British employment data released on Tuesday came in mixed with unemployment coming in at 3.09% against an expected 4.7%. The claimant count a measure of unemployment rose 528,900 in May an improvement from 1032.7K reported last month.
The pair had initially dropped to five day lows as markets cheered optimism of BREXIT breakthrough. U.K Prime Minister Boris Johnson is engaged in high level talks with EU leaders with policymakers hinting at fresh momentum in the negotiations.
A strengthened Euro however continues to curtail GBP impact on the EUR/GBP Pair. The EUR has continued to strengthen across the board. The Euro is on it longest spree of gains against the Dollar having resumed the uptrend on a reduction in risk sentiment in the market.
Improving economic data within the Euro zone in the wake of the European Central Bank approving a €1.35 trillion plan has continued to offer support to the single currency against the pound. Similarly, the easing of lockdown restrictions with EU members has seen an uptick in economic activity which had come to a halt in the wake of the COVID-19 pandemic.
Looking ahead, traders await the release of the ZEW Economic Sentiment Index. The Index measures analyst’s expectations about economic development over the next six-months. The report should sway trader’s sentiments on the Euro which have improved significantly in the aftermath of the COVID-19 pandemic.