EUR/GBP has come off this morning after the latest batch of UK jobs data was slightly better than expected, ING’s FX strategist Chris Turner notes.
EUR/GBP can drift towards 0.8400
“While July's average earnings figures were on consensus, employment growth in July was much stronger than expected. And the jobless claims rise in August was much lower than expected. While these jobs figures are notoriously volatile, they can probably maintain the wedge between the expected Bank of England and Fed easing cycles.”
“For the remainder of this year, markets price 107bp of Fed cuts versus just 48bp for the BoE. EUR/GBP can drift towards 0.8400 – but may struggle to break that level given that we think the euro could derive some support from the ECB meeting this Thursday.”
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