EUR/GBP climbs to near 0.8300 as UK Unemployment Rate rises to 4.3% in quarter to September

• EUR/GBP gains traction to near 0.8295 in Tuesday’s early Asian session. 
• The UK Unemployment Rate climbed to 4.3% in three months to September.
• The ECB is on track to deliver more rate cuts.

The EUR/GBP cross gathers strength to around 0.8295 during the early European session on Tuesday. The Pound Sterling (GBP) weakens against the Euro (EUR) after the recent mixed UK labor market data. The attention will shift to the German November ZEW survey, which is due later on Tuesday. 

Data released by the Office for National Statistics (ONS) on Tuesday showed that the UK ILO Unemployment Rate rose to 4.3% in the three months to September from 4.0% in the previous period. This figure came in weaker than the expectation of 4.1%. Meanwhile, the Claimant Count Change increased by 26.7K in October versus 10.1K prior (revised from 27.9), below the market consensus of 30.5K. 

UK Wage inflation, as measured by Average Earnings excluding Bonus climbed 4.8% 3M YoY in September versus 4.9% in August,  beating the estimation of a 4.7% rise. Average Earnings including Bonuses also rose by 4.3% in the same period, compared to 3.9% (revised from 3.8%) quarter through September. The Pound Sterling attracts some sellers in an immediate reaction to the UK employment report. 

On the other hand, the European Central Bank (ECB) policymaker Robert Holzmann said on Sunday that there is no reason for the European Central Bank not to cut interest rates in December, but the decision will be based on the incoming data. The expectation that the ECB is likely to deliver more rate cuts might cap the upside for the cross in the near term. Markets have fully priced in a 25 basis points (bps) rate cut then, as well as a nearly 20% chance of a larger 50 bps move.