GBP/EUR Exchange Rate Subdued in spite of Upbeat Jobs Report
The Pound Euro (GBP/EUR) exchange rate is on the back foot this morning, with the pairing dipping from a one-week high struck on Monday.
At the time of writing, the GBP/EUR exchange rate is trading at around €1.1593, down slightly from this morning’s opening rate.
Pound (GBP) Weakens despite Falling Unemployment
The Pound (GBP) has ticked lower against the Euro (EUR) this morning as some upbeat jobs figures were unable to sustain Sterling’s gains from the start of the week.
According to data published by the Office for National Statistics (ONS) the UK’s unemployment rate fell from 5% to a three-month low of 4.9% in February, beating expectations it would rise to 5.1%.
Accompanying earnings figures revealed that wage growth dip from 4.8% to a still robust 4.4% over the same period.
While the drop in the unemployment rate was welcomed by GBP investors, analysts expressed concerns over a drop in payrolls numbers, whilst also forecasting the jobless rate will spike once the government’s furlough scheme comes to an end.
Suren Thiru, head of economics at the British Chambers of Commerce (BCC) said:
‘The latest data confirms that the UK labour market remains subdued. While there was a marginal fall in the unemployment rate, the squeeze on activity from ongoing restrictions helped drive a decline in payroll employment in March.
‘Although the furlough scheme will limit the peak in job losses, the longer-term structural unemployment caused by Covid-19, particularly among young people, may mean that the road back to pre-pandemic levels lags behind the wider economic recovery.’
Euro (EUR) to be Bolstered by Johnson & Johnson Vaccine Authorisation?
At the same time, the Euro (EUR) is edging higher this morning as EUR investors await the publication of the European Medicines Agency (EMA) official assessment of Johnson & Johnson’s single-dose coronavirus vaccine later today.
The use of the Johnson & Johnson vaccine was suspended in Europe and the US last week, after the jab was linked to extremely rare blood clots.
Assuming the EMA gives its authorisation for the jab to continue to be used in the EU, this could help to further accelerate Europe’s vaccine rollout and bolster the Euro.
However, any upside in the Euro could prove limited if the EMA imposes limits on its use such as not allowing it to be used on under 30s.