Euro Pauses Near 0.8600, Eyes on UK Jobs Data
The EUR/GBP currency pair is currently hovering around 0.8600 in the European session on Monday, following a retracement from its previous session's losses.
Euro Supported by Upbeat Retail Sales:
- The Euro has gained some ground due to positive sentiment stemming from stronger Eurozone retail sales data released last week.
- March retail sales in the Eurozone saw a significant increase (0.8% MoM), the highest since September 2022.
- Year-over-year sales (YoY) also showed positive growth (0.7%) for the first time since September 2022, indicating a potential improvement in consumer spending.
Pound Sterling: Mixed Signals:
- The GBP received a boost on Friday due to the release of higher-than-expected UK GDP figures.
- The UK economy grew by a robust 0.6% in Q1, surpassing expectations and ending the country's brief recession.
- This marked the strongest GDP growth in over two years.
Dovish BoE Hints Weigh on GBP:
- However, dovish comments from Huw Pill, the Bank of England's Chief Economist, put some pressure on the Pound.
- Pill echoed the BoE's decision to hold rates at 5.25% but hinted at the possibility of future rate cuts, potentially dampening the GBP's appeal.
Focus Shifts to UK Employment Data:
- Market participants now turn their attention to UK employment data scheduled for release on Tuesday.
- Expectations are for an increase in the number of individuals claiming jobless benefits in April (Claimant Count Change).
- The ILO Unemployment Rate (3M) is also anticipated to rise.
Eurozone Data on Tap:
- Investors will also be watching German Consumer Price Index data for April, which is expected to remain unchanged.
The EUR/GBP pair is in a wait-and-see mode. The Euro's gains from positive retail sales data are being countered by the Pound's resilience due to strong GDP growth. The upcoming UK jobs data could influence the pair's direction in the near term.