As Sterling holds firm against its G10 peers this morning, EURUSD has seen some considerable downside as it drops down into the 1.17’s. After reaching 2-week highs at the end of Friday’s session at 1.1831, the pairs latest fall has stemmed from the news that Johnson & Johnson have paused their COVID-19 vaccine trails.
Prior to this morning’s price action, EURUSD had a relatively quiet day yesterday. The pair opened the session at 1.1808, before closing the day off at 1.1804.
On the data front, this morning we have had a number or releases, most importantly the UK employment reports; showing the UK unemployment rate to have surged to it’s highest levels in over 3 years as COVID-19 continues to debilitate the economy. Forecasted at 4.3%, the actual headline figure came out at 4.5%, compared the previous of 4.1%. Jonathan Athow, the ONS's Deputy National Statistician for economic statistics, says there has been a "sharp increase" in those out of work and job hunting since March. He went on to add that “overall employment is down about half a million since the pandemic began and there are particular groups who seem to be most affected, young people in particular”.
Despite increasing infections cases and chaotic unemployment data, the Pound is holding firm, some may argue it is bracing itself for the volatility expected towards the end of the week. GBPUSD opened on Monday at 1.3040, and managed to gain some momentum, before closing the day off at 1.3060.
As for GBPEUR, rising infection rates on the old continent continue to strain the single currency. GBPEUR was able to make subtle gains on Monday; opening the session at 1.1043, the pair was able to close off the trading day above that mark at 1.1064.
Today will also prove to be an interesting one for the Eurozone and the US regarding economic data – with both powerhouses’ expecting a plethora notable of releases. At 07:00 we had the Inflation Rate YoY for Germany come out as forecasted at -0.2%. Then at 10:00 we had the ZEW Economic Sentiment Index release for both Germany and the Eurozone. The Eurozone figure came out better than the previous at 52.3; however, the German figure fell short of expectations – forecasted at 73 and a previous of 77.4, the actual figure of 56.1 was exceptionally disappointing. Moving stateside, in the afternoon we have the Core Inflation Rate YoY for September being released at 13:30, expected to come in at 1.8%.