GBP Strength Checked by Rising Unemployment, USD in Holding Pattern, Euro Finds Footing.

  • GBP strengthens after UK wage figures exceed expectations, signaling robust wage pressures.
  • However, gains are limited by rising unemployment rates, with 177,000 jobs lost and the unemployment rate rising to 4.3%.
  • USD remains steady as investors await producer inflation data for April and Jerome Powell’s speech.
  • EUR shows resilience, rebounding 1.7% against the dollar due to improving economic indicators in the eurozone.
  • Concerns persist for the ECB as sustained weakness in the euro could limit policy options and impact inflation.

GBP: Despite robust wage figures, the British Pound faces resistance due to escalating unemployment rates, tempering its upward trajectory. UK wages surged by 5.7% in March, surpassing expectations, indicating sustained wage pressures. However, a concurrent increase in job losses to 177,000 and a rise in unemployment to 4.3% curbed the Pound’s gains, highlighting concerns about the labor market’s health.

USD: Foreign exchange markets remain subdued as investors await key data releases and Federal Reserve Chairman Jerome Powell’s speech. The US Dollar Index hovers above 105.00, with attention on April’s producer inflation data. Chairman Powell’s discussion at the Foreign Bankers’ Association’s meeting in Amsterdam adds to market anticipation. Meanwhile, minor fluctuations are observed in major currency pairs like EUR/USD and USD/JPY.

EUR: Despite recent concerns about eurozone fragility, the euro has found support, buoyed by improving economic indicators. Surpassing the United States in business activity expansion in April, the eurozone’s strengthening macro backdrop has contributed to a 1.7% recovery against the dollar. This resilience eases pressure on the European Central Bank (ECB) but sustained weakness in the euro could limit its policy options, especially regarding interest rate cuts. Geopolitical tensions and oil price fluctuations remain key factors that could influence the euro’s trajectory.

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.