Pound Euro Exchange Rate Tumbles To 4-Month Low Following UK Employment Data

October 17, 2012 - Written by Tim Boyer

STORY LINK Pound Euro Exchange Rate Tumbles To 4-Month Low Following UK Employment Data

There has never been a time when more workers have been gainfully employed in the British economy, (since records began in 1971). This morning’s official UK government labour market figures revealed that some 30 million people are working in the UK at the moment. What this headline number did not reveal, however, was the extent to which the British workforce has become ‘part-time’ in recent years. Those who like to look at the glass as being ‘half empty’ will point out that by the Office of National Statistic’s own admission, the number of people out of work in the UK remains at 2.53m - hardly good news for the UK or for the Pound.

Meanwhile, this morning’s Bank of England minutes proved to be more Sterling-positive than some had been expecting, revealing that all nine members of the Bank’s MPC voted to maintain Britain’s current monetary policy stance. It appears that the MPC are comfortable to take a ‘wait and see’ approach to the UK’s Quantitative Easing programme, which currently stands at £375bn. The fact that any increase to the programme appears to have been ‘backburnered’, at least for the moment, may help the Pound to stop leaking support in the short-term.

Meanwhile, this morning’s whole of eurozone Construction Output data isn’t normally a market-moving release. However, the August figure considerably bettered expectations, showing at a seasonally adjusted monthly gain of 0.7%, up from July’s 0.1% print. The figure has helped send the GBP EUR exchange rate all the way down to 1.2295 on the day, its lowest level since the start of June.

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