EUR/GBP demonstrates a lackadaisical decline near 0.8670; UK employment is in focus
After relinquishing the 0.8650 support level, EUR/GBP is anticipated to resume its decline. Positive employment news from the United Kingdom will bolster the pound bulls. Corporate profit margins in the Eurozone are being impacted by escalating energy costs.

After reaching a four-day low of approximately 0.8650 on Monday, the EUR/GBP pair demonstrated a brief pullback. The cross is anticipated to begin its downward path after completing the retreat and will accelerate its decline after giving up the important support level of 0.8650. The asset will likely respond to upcoming employment statistics from the United Kingdom.
According to forecasts, the unemployment rate in the United Kingdom will continue at 3.8%. While the number of individuals receiving unemployment benefits will decrease by 9.2k, the unemployment rate will remain same. The Average Earnings data is the catalyst that families should consider due to greater payouts in an inflationary climate. The labor cost index will increase substantially to 5% from 4.7%, which would assist households in offsetting the higher payments caused by surging inflation.
In addition, Wednesday's UK inflation data is also of great importance. The Consumer Price Index (CPI) in the United Kingdom is anticipated to remain above 10% at 10.2%. This will compel the Bank of England (BOE) to further increase interest rates. This may exacerbate the policy gap between the Bank of England and the European Central Bank.
Meanwhile, the bulls of the common currency face rising energy costs. The forthcoming winter season in Europe will increase the amount of energy required to power heaters and other heat-generating appliances. Consequently, energy demand will increase more. Following an unanticipated 75 basis point (bps) increase in interest rates by the ECB last week, the central bank will announce additional rate increases as price pressures remain above the intended rate.
The corporate sector in the eurozone is experiencing a period of falling margins due to rising energy costs. As a result of rising energy costs, input expenses for major corporations have skyrocketed, squeezing their operating margins and driving a few enterprises to bankruptcy. The impact of rising interest rates and rising energy costs on their earnings performance is significant.
Bonus rebate to help investors grow in the trading world!