During the early European trading hours on Tuesday, the EUR/GBP cross is seen trading with a softer tone near the 0.8590 mark. This slight decline follows a retracement from the psychological level of nearly 0.8600, primarily driven by mixed employment data from the UK.
The UK Office for National Statistics released its latest data, indicating that the ILO Unemployment Rate rose to 4.3% in the three months to March, in line with market expectations, while the number of people claiming jobless benefits increased by 8.9K in April. Despite these figures, the UK Employment Change for the same period showed a decrease of -177K, albeit marginally higher than the previous reading of -156K. However, the Pound Sterling (GBP) exhibited minimal reaction to these reports.
Looking ahead, market attention is poised for the ZEW Survey results from the Eurozone and Germany, alongside the European Central Bank (ECB) member Isabel Schnabel’s speech later in the day. Following the ECB’s decision to maintain interest rates at a record high during its last meeting, investors remain attuned to any hints of a potential rate cut in June, considering the prevailing downward trend in inflation measures and easing wage growth.
Furthermore, Wednesday’s release of the advanced Eurozone Gross Domestic Product (GDP) for Q1 will provide crucial insights into the region’s economic outlook. A weaker-than-expected GDP outcome could exert downward pressure on the Euro (EUR), consequently influencing the trajectory of the EUR/GBP cross.
