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UK jobs resilience and German sentiment lift European FX mood
The UK unemployment rate stayed at 4.9%, while Germany’s ZEW sentiment index jumped to 26.3 from 10.5, though Iran Strait of Hormuz uncertainty continued to weigh on the outlook.
European FX trading was comparatively calm, with limited data driving sentiment. The main macro catalyst was the UK employment report for the three months to May, showing unemployment steady at 4.9% alongside employment rising by 147,000. Total pay growth eased to 4.3%, but traders reacted only modestly because the figures did not materially change interest rate expectations.
Forexlive said the German ZEW economic sentiment index surged to 26.3 from 10.5, well above forecasts, signaling improving recovery mood tied to confidence in the government reform agenda. The same survey flagged that uncertainty around the Iran conflict and oil prices remains a significant risk to the economic outlook despite the improvement in sentiment.
In the Middle East, Iran indicated that any decision to reopen the Strait of Hormuz would depend on security conditions, without providing a timeline. Forexlive added that Tehran plans to keep the strait closed at least until a potential ceasefire is secured, while investors also stayed focused on US-Iran headlines as the market weighs the implications for risk sentiment.