EUR/GBP hovers around 0.8600, awaits UK employment data
|- EUR/GBP edges higher due to the positive shift in consumer spending trends in Eurozone.
- BoE’s Chief Economist Huw Pill indicated a growing belief that rate cuts might be on the horizon.
- The higher-than-anticipated UK GDP data provided support for the Pound Sterling.
EUR/GBP retraces its recent losses from the previous session, hovering around 0.8600 during the European session on Monday. The Euro gains ground due to a prevalent positive sentiment after the stronger Retail Sales data from the Eurozone during the last week.
The monthly Eurozone Retail Sales (MoM) surged by 0.8% in March, marking the most significant increase in retail activity since September 2022. Furthermore, Retail Sales (YoY) also increased 0.7%, indicating the first growth in retail since September 2022 and signaling a positive shift in consumer spending trends.
On the GBP front, higher-than-anticipated UK Gross Domestic Product (GDP) figures released on Friday, provided support for the Pound Sterling (GBP), undermined the EUR/GBP cross. The UK economy expanded 0.6% in Q1, surpassing projections and indicating the end of the country's brief recession. This robust economic rebound marked the strongest growth seen in over two years.
However, the British Pound encountered a challenge following dovish remarks from Huw Pill, Chief Economist at the Bank of England (BoE). Pill echoed the sentiment of the majority of the BoE's Monetary Policy Committee (MPC), who opted to maintain interest rates at 5.25% on Thursday. Nevertheless, he subsequently indicated a growing belief that rate cuts could be on the horizon.
Market participants are likely to anticipate employment data on Tuesday, with expectations of the UK Claimant Count Change showing an increase in the number of individuals claiming jobless benefits in April. Additionally, the ILO Unemployment Rate (3M) is anticipated to show a rise in the number of unemployed workers in the UK. In the Eurozone, German Consumer Price Index data are expected to remain unchanged across the board for April.
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