A look at the currency markets in the wake of today's employment data release shows:
The pound sterling to euro exchange rate is trading 0.06 pct higher at 1.1837.
The euro to pound is therefore at 0.8448.
NB: Please be aware that the above are spot market quotes to which your bank will affix their own discretionary spread. Please note, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.
The pound sterling enjoyed a positive tone in yesterday's trading session, on Wednesday we see the UK currency remains on the front foot as the latest data from the Office for National Statistics shows the UK employment situation continues to improve.
This is important as the Bank of England is increasingly basing monetary policy on the level of employment in the economy.
Employment data beats expectations, but Brit's just aren't earning more
Todays data shows that while the employment situation continues to improve, the earning power of the average UK citizen continues to sit well below the inflation rate:
Claimant Count Change (Sep): Beat expectations in comfortable fashion by reading -41.7K. Consensus forecasts at -25.0K, previous month read at -32.6K.
ILO Unemployment Rate (3M) (Aug): Comes in at 7.7%. Forecasts were for 7%, unchanged on last month at 7%.
Average Earnings including Bonus (3Mo/Yr) (Aug): Came in at 0.7%, consensus expected +1%. Last month read at 1.1%.
Average Earnings excluding Bonus (3Mo/Yr) (Aug): Read at 0.8%, consensus was at +1%, previous @ +1%.
Outlook for the euro pound exchange rate
Turning to the outlook for the euro pound exchange rate, Lloyds Bank Research offer the following forecast:
"GBP/USD traded well yesterday after testing support at 1.5915, and strong numbers today suggest scope for a sharper move back above 1.60. EUR/GBP should also have downside potential, with the 0.85 area likely to prove a medium term top if the data today proves favourable, with the recent 0.8330 low a medium term target." - Lloyds Bank Research.
Sasha Nugent at Caxton FX confirms the momentum is turning back towards sterling:
"After some sessions of euro domination the pound is back, and employment figures this morning should help the currency to maintain its control over the GBP/EUR rate. Inflation figures did enough to put sterling ahead and so far this morning sterling has continued to drive this rate upwards.
"Upside surprise from eurozone inflation figures could prove to be a problem for sterling, however we feel the pound will be able to keep the GBP/EUR rate above 1.18 today."