ExchangeRates.org.uk – At the time of writing, traded at around €1.1814, down roughly 0.3% from Monday’s opening rate.The Euro (EUR) managed to strengthen against the majority of its peers on Monday despite the publication of Germany’s latest producer price index (PPI).
The index revealed that the PPI in the Bloc’s largest economy slipped in December and fell from a previous reading of 0.5% to -0.1%, rather than printing at a more modest 0.3% expectation.
However, this negative data release failed to undermine the single currency on Monday thanks to the Euro’s negative correlation with a declining (USD) on the day of Donald Trump’s inauguration as 47th President of the United States.
On Monday, the Pound (GBP) saw limited movement against most of its counterparts, as the absence of significant domestic data left the currency without a clear direction.
Despite an overall positive market sentiment, GBP failed to leverage its increasingly risk-sensitive nature, remaining largely unchanged throughout the European trading session.
Investors were likely hesitant to make bold moves on Sterling due to the lack of economic data on Monday, preferring to wait for the upcoming labour figures scheduled for release on Tuesday.
GBP/EUR Forecast: UK Jobs Data to Drive Movement
Looking ahead, the primary driver of movement for the Pound Euro exchange rate looking ahead to Tuesday will likely be the publication of the UK’s latest labour data.
The data is anticipated to show that the UK’s unemployment rate stayed at 4.3%, while the latest average earnings index (excluding bonuses) is expected to increase from 5.2% to 5.5%.
If the data meets these expectations and shows an increase in the UK’s average earnings index, GBP exchange rates will likely strengthen following the release.
Turning to the Euro, Germany is set to release its latest Zew economic sentiment index for this month, which is forecast to marginally dip.
Should the data print as expected and show a decline in economic morale, EUR exchange rates could be undermined as we move into Tuesday’s European session.
This content was originally published on ExchangeRates.org.uk
