Jobs data gives pounds a lift – ING

EUR/GBP fell this morning after the latest batch of UK jobs data was slightly better than expected, notes Chris Turner, FX strategist at ING.

EUR/GBP may move towards 0.8400

“While July’s average earnings figures were in line with consensus, employment growth in July was much stronger than expected. And the increase in jobless claims in August was much smaller than expected. While these jobs figures are notoriously volatile, they are likely to keep the peace between the expected easing cycles of the Bank of England and the Fed.”

“For the rest of this year, markets are pricing in 107bp of Fed tapering versus just 48bp for the BoE. EUR/GBP may move towards 0.8400 – but may struggle to break above this level as we believe the euro may find some support from Thursday’s ECB meeting.”