English
The EURGBP remains in the red following UK employment data, maintaining a position above the middle of 0.8700
Tuesday sees some selling pressure on EURGBP, although the downside remains capped. The mixed employment numbers in the United Kingdom confirm more BoE rate hikes and support the British Pound. Discussions of a more aggressive ECB tightening help the common currency and bolster the cross.
During Tuesday's early European session, the EURGBP cross extends the previous day's small retreat from the 0.8820-0.8830 resistance zone and creeps lower. Following the release of the most recent employment data from the United Kingdom, the cross stays on the defensive in the 0.8770-0.8765 range, with little movement.
In the three months leading up to September, the UK Office for National Statistics stated that the unemployment rate unexpectedly increased to 3.6% from 3.5% previously. In addition, the number of people claiming unemployment-related benefits was 3,300 compared to the average projection of a decrease of 12,500. However, the disappointment was somewhat by improved wage growth figures.
In actuality, the Average Earnings Excluding Bonuses increased from 5.5% to 5.7%, exceeding expectations for an increase to 5.6%. The report supports market expectations of a further policy tightening by the Bank of England, which is anticipated to provide some support for the British pound. Nevertheless, a minor increase in demand for the shared currency acts as a tailwind for the EURGBP cross, limiting its downside.
Against the backdrop of discussions regarding a more aggressive policy tightening by the European Central Bank (ECB), the advent of fresh dollar selling provides support for the Euro. Before putting strong negative trades on the EURGBP cross and preparing for greater intraday losses ahead of the German ZEW Economic Sentiment, this in turn calls for some prudence.
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