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UK unemployment rate rose to 4.3% in the three months to March
The US dollar fell short yesterday losing around 0.3% against the euro – which remains close to a five-week high against the dollar – and 0.3% against the pound, as investors anticipated the release of the upcoming UK jobs report.
This morning, the Office for National Statistics revealed the UK unemployment rate rose to 4.3% which is slightly higher than the previous month and expectations of 4.2%. Meanwhile, the number of employed individuals fell by 177,000 in the three months to March. This was less than market forecasts of a 215,000 decrease.
The German inflation rate remained unchanged at 2.2% in April, in line with market forecasts.
Yesterday, MP and former business secretary Jacob Rees-Mogg criticised the Bank of England for its inability to reduce inflation more quickly. He said, “Its miserable incompetence allowed inflation to peak at almost six times its target rate and now it is demanding higher taxes because of its hopeless bond trading strategy.”
Many Conservatives have criticised the Bank for not raising interest rates sooner, which has resulted in policymakers keeping rates higher for longer than in neighbouring countries. The Bank decided last week to hold the base rate at 5.25%, still miles off its 2% target.
In Portugal, the annual inflation rate expanded by 2.2% in April, easing from 2.3% in March and in line with preliminary estimates.
Later this morning we will receive an indication of German and euro area economic sentiment courtesy of the Centre for Centre for European Economic Research (ZEW). The most recent German reading of 42.9 in April was the highest since February 2022 and markets forecast a slight decline in May.
US PPI figures are also expected this afternoon which will be followed by a couple of speeches from the Federal Reserve, including chairman Jerome Powell.
Tomorrow morning, the spotlight will be on labour data and GDP growth rate figures for the euro area, followed by US inflation in the early afternoon.
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business account manager on 020 7898 0500 or your Private Client Account Manager on 020 7898 0541.
GBP: Marginal gains against the euro
The pound made marginal gains against the single currency yesterday ahead of the UK jobs report. However, sterling is close to half a per cent down on the month. Looking at the bigger picture, the GBP/EUR rate is over 2% higher since this time last year.
GBP/USD: the past year
EUR: Investors eye UK jobs report
After two consecutive weeks of advances against the pound, euro investors will be keeping a close eye on the UK jobs report which was released this morning. Strong pay data could give the pound the bump it needs to end the week in the green and stage a recovery.
GBP/EUR: the past year
USD: US inflation expectations rise in April
US consumer inflation expectations for the year ahead increased to 3.3% in April 2024, the highest in five months, from 3% in each of the previous four months.
EUR/USD: the past year
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business account manager on 020 7898 0500 or your Private Client Account Manager on 020 7898 0541.
