EUR/GBP Dips as UK Jobs Boost Pound: SA Traders Watch

  • The EUR/GBP currency pair weakened, reaching an intraday low near 0.8585, influenced by strong UK average earnings data which overshadowed disappointing employment change and unemployment rate figures.
  • UK’s positive earnings data is boosting hawkish expectations from the Bank of England (BoE), applying downward pressure on the EUR/GBP exchange rate, while German Wholesale Price Index (WPI) figures were softer than expected, fueling concerns about Germany's economic recovery.
  • For South African investors, fluctuations in the EUR/GBP pair are significant, as the Euro and British Pound are key currencies affecting trade and investment flows between South Africa, Europe, and the UK, and a stronger European economy typically increases demand for South African exports.

EUR/GBP weakened by 25 pips to touch an intraday low near 0.8585 as European trading kicks off this Tuesday. The cross-currency pair appears to be reacting to promising UK earnings data, showing relatively less responsiveness to the disappointing changes in employment and unemployment rates as outlined in the most recent report from the UK National Statistics.

South African investors closely monitor the EUR/GBP pair, given that both the Euro and the British Pound are key currencies affecting trade and investment flows between South Africa, Europe, and the UK. The data from the UK, a significant trading partner to South Africa, is of particular relevance for South African businesses and investors, as a stronger Pound can potentially affect trade balances.

Discussing the newest UK jobs data, the headline Employment Change registered at -66K for June, contrasting sharply with a 50K forecast and a prior figure of 102K. Concurrently, the ILO Unemployment Rate escalated to 4.2% for the three months leading to June, defying market predictions of holding steady at 4.0%. Of significant note, however, is the surge in Average Earnings (both inclusive and exclusive of bonuses) for the three months to June. This uptick is fortifying hawkish anticipations surrounding the Bank of England (BoE), which appears to be exerting downward pressure on the EUR/GBP exchange rate.

On Monday, the UK’s Chartered Institute of Personnel and Development (CIPD) disclosed results of their most recent survey. As reported by Reuters, it indicated that HR executives are anticipating a median increase in basic pay rates of 5% – a figure that remains consistent with the last two quarters and represents one of the highest figures since the survey’s inception in 2012. This revelation strengthens the hawkish sentiment concerning the BoE, following last week’s encouraging UK growth statistics.

In contrast, Germany’s Wholesale Price Index (WPI) for July rose marginally to -2.8% YoY from the previous -2.9%, but this was softer than the anticipated -2.6%. The monthly WPI figures retained the -0.2% MoM numbers, defying the -1.4% market projections.

Subsequent to the release of this data, the German Economy Ministry remarked, as per Reuters, that present early indicators do not yet signify a lasting economic rebound in the months ahead. The report, nevertheless, also underscored the budding signs of hope, evidenced by a predicted cautious recovery in private consumption, services, and investment, set to gather momentum as 2023 unfolds.

For South African investors, a robust European economy often leads to stronger demand for South African exports, thereby supporting the Rand (ZAR).

It’s crucial to acknowledge that the Euro’s resilience in the face of the US Dollar’s withdrawal from a five-week peak, notably before the forthcoming sentiment figures from the ZEW Institute, is helping to stabilize the EUR/GBP rate. As we progress, the ZEW Economic Sentiment indicators for both Germany and the Eurozone will be vital for more definite trends.

Technical Analysis

In the technical landscape, a distinct reversal from the 100-DMA resistance, currently situated around 0.8665, aligns with an emerging bear cross on the MACD and a consistent RSI (14) line to sustain the optimism of EUR/GBP pair sellers, despite recent fluctuations.

For South African traders and investors, keeping an eye on the EUR/GBP pair and understanding the economic indicators from these significant economies can provide insights into global trade conditions, which indirectly influence the Rand and, subsequently, local investments.

Visited 2 times, 1 visit(s) today

Stay ahead in the financial world – Sign Up to Rateweb’s essential newsletter for free. Get the latest insights on business trends, tech innovations, and market movements, directly to your inbox. Join our community of savvy readers and never miss an update that could impact your financial decisions.

Do you have a news tip for Rateweb reporters? Please email us at


Start trading with a free $30 bonus

Trade stocks, forex, commodities, metals and CFDs on stock indices with an internationally licensed and regulated broker. For all clients who open their first real account, XM offers a $30 trading bonus without any initial deposit needed. Learn more about how you can trade over 1000 instruments on the XM MT4 and MT5 platforms from your PC and Mac, or from a variety of mobile devices.


Personal Financial Tools

Below is a list of tools built to assist South Africans to make the best financial decisions:



South Africa’s primary source of financial tools and information

Contact Us


Rateweb strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions.

Rateweb is not a financial service provider and should in no way be seen as one. In compiling the articles for our website due caution was exercised in an attempt to gather information from reliable and accurate sources. The articles are of a general nature and do not purport to offer specialised and or personalised financial or investment advice. Neither the author, nor the publisher, will accept any responsibility for losses, omissions, errors, fortunes or misfortunes that may be suffered by any person that acts or refrains from acting as a result of these articles.