EUR/GBP Hits Two-Week Low as Sterling Strength Fuels Decline

The EUR/GBP currency pair drifted to its lowest point in two weeks on Monday, reaching as low as 0.8554 before stabilizing at around 0.8560.

This decline comes despite the European Central Bank's hawkish stance, which has been a significant support for the euro.

However, ECB President Christine Lagarde's recent comments have shifted focus away from interest rate guidance and towards more pressing issues such as Europe's reliance on imported artificial intelligence and the energy shock, which she described as 'longer-lasting'. Meanwhile, euro area inflation remains steady at 3.3%, still above the 2% target.

The upcoming UK jobs data release on Tuesday is expected to show a softening of the labour market, with forecasted figures including average earnings including bonuses at 3.9% (down from 4.1%), an ILO Unemployment Rate of 5% (up from 4.9%), and an increase in Claimant Count Change.