The British Pound has been the center of attention for over a week as it hit a low point against the US Dollar in the global currency markets, as a result of its two-year low against the US Dollar and its one-and-a-half-year low against the Euro, however things are beginning to change.
This morning, the Euro began to slide against the British Pound, which resulted in the Pound regaining some of its ground from yesterday's lowest valuation against the Euro since the end of 2020.
Whilst the British Pound is still at an overall low over the one year moving average, it pulled back this morning as the European market's trading sessions opened and began an upward direction in terms of value.
It is fair to say that there is still a very bearish overall outlook regarding the British Pound and that it is by no means back to buoyancy but it does remain the world's most valuable fiat currency, and it is beginning to show a rebound, albeit a small one, against the Euro, standing now at the high 1.15 mark whereas at 6.00am this morning it was at a one-and-a-half-year low, languishing at around the low 1.15 mark.
Employment data released by the British government is being cited as one of the factors which took the pound to its low point at the opening bell this morning, the information stating that unemployment in the United Kingdom rose from 3.7% to 3.8% in the three months to April 2022, however the very low point was short lived.
The interesting combination of metrics is that despite the slight increase in unemployment over a three month period in the United Kingdom, there has been an increase in new job openings in March this year with around 1,300,000 being available which is a a new record, albeit only slightly above March’s 1.296 million.
This perhaps shows that there is some degree of buoyancy within the diversfied industry sectors that make up the British economy, however for many private individuals, the cost of living increase has been enough to dampen many spirits as salaries are lagging behind rising prices, with pay in real terms shrinking by 2.2% on the year excluding bonuses. As inflation hit 9% in May, British households are facing an intense squeeze in living standards.
These contrasting pieces of data may well be partially responsible for the volatility between the Pound and the Euro, however let's also bear in mind that the European Union's member states are facing similar inflation rates and economic challenges as Britain, therefore the two currencies are volatile, despite similar circumstances.
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