Sterling Gains Against Euro As UK Unemployment Drops

Published: Wednesday, 23 January 2013 18:00 BST - Written by John Cameron

STORY LINK Sterling Gains Against Euro As UK Unemployment Drops

Sterling has stolen the headlines in the global currency markets so far during today’s session, following UK Prime Minister David Cameron’s set-piece ‘eurozone speech’ at the start of today’s European equities session. The UK Prime Minister surprised few observers by committing his Conservative party to holding a so-called ‘in / out’ referendum on Britain’s continued membership of the EU, should the Conservatives win the next UK general election due to be held by the middle part of 2015.

The market has generally taken a dim view of previous assertions by Cameron that hinted at a future isolationist position for the UK in Europe. However, in a clear case of ‘cart before the horse’, today’s announcement failed to hurt the Pound overly – the content of Cameron’s comments had been largely factored-in already.

Cameron’s speech was only one factor affecting Sterling today – shortly after he finished speaking, the Office of National Statistics issued the latest set of official UK employment figures, which showed that the total level of joblessness in Britain had fallen to its lowest level since the middle part of 2011. The overall level of overall unemployment in Britain slipped to 2.49m thanks to some 37,000 new jobs being generated in the domestic economy in the three months to the end of November 2012. The numbers provide a chink of light for investors holding Sterling-denominated assets ahead of Friday’s Q4 GDP data. Analysts are still expecting that this figure will place further selling pressure on the Pound.

Sterling has clawed back a portion of the ground it has lost against the euro since the turn of the year so far today; the Pound Euro exchange rate (currency : GBP EUR) currently stands at 1.1928. However, the pair is far from guaranteed to hold at these levels as Friday approaches.

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