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Euro weakens versus pound as upbeat UK jobs data offsets risk

EUR/GBP slipped below 0.8500 after UK ILO unemployment held at 4.9%, while geopolitical risks tied to oil weighed on euro sentiment.

Reported · Written up by our desk · Major Pairs

The euro pulled back against the British pound, with EUR/GBP retreating below 0.8500 after trading around 0.8515 earlier, according to FXStreet. The move reflects a mix of upbeat UK labor data and broader risk sentiment pressured by geopolitical developments and higher oil prices.

FXStreet said the UK ILO Unemployment Rate stayed steady at 4.9% for the three months before May, compared with expectations for a rise to 5%. It also cited that unemployment claimants increased by 6.7K, below the 28.3K forecast, and that the April Claimant Count Change was revised down to 1.3K from prior estimates of 31.2K, with the data so far having only a moderate impact on the pound.

On the geopolitical and oil front, FXStreet pointed to continued tensions in the Middle East, including reports of US military strikes in Iran for a 10th day and announcements related to a blockade of Saudi oil exports by the Tehran-backed Houthis. Crude prices ticked lower from six-week highs as mediators reportedly delivered a proposed 10-day ceasefire to Iranian authorities, offering some relief but not fully reversing the risk backdrop.

Looking ahead, FXStreet said investors will watch the ZEW Economic Sentiment Survey later in the day and the European Central Bank monetary policy decision on Thursday. While the ECB is widely expected to leave rates on hold, market focus will include the probability of another 25 basis points rate hike in September.

Latest closeWTI crude $79.00 ▼0.8%

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