Nov 14, 2023

The EURGBP exchange rate has three high-level data releases ahead of Tuesday. 

eurgbp chart

EURGBP – Daily Chart

EURGBP has hit resistance at the May highs, and the upcoming data could spur a correction to 0.8650 or another leg higher. 

The first data release will be at 3pm HKT, with UK employment numbers. A few hours later, GDP growth estimates for European Q3 will be released. At the same time, German ZEW economic sentiment figures will also be released.  

With the number down from 28.1 in February, an improvement on the 5 seen last month may be possible. However, UK employment is set to weaken, with -198k jobs, up from -82k in the previous month. 

A slight rise in unemployment from 4.2% to 4.3% is also expected. Euro growth figures are expected to show a modest decline from 0.2% to -0.1%. 

According to the International Monetary Fund, Europe’s economy is expected to avoid a recession. However, getting inflation back down to target may take several years. 

According to the IMF, Europe’s economy is unlikely to crash even after a year of interest-rate increases to bring down inflation. While rising wages are helping Europe’s economic recovery, they have also raised inflationary pressures, especially if productivity gains don’t match them. 

European Central Bank President Christine Lagarde recently hinted that rates are near their peak but added that the bank will not begin cutting rates for at least “the next couple of quarters”. 

Her comments were echoed by Andrew Bailey, chief of the Bank of England, who said he was “optimistic” about inflation returning to normal levels but warned that the cost of borrowing would remain high for some time. 

Mr Bailey said the bank’s recent forecasts expect a two per cent inflation level return by 2025. He added that it was “too early” to discuss cutting interest rates.

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