ExchangeRates.org.uk – (GBP) climbed against the Euro and most of its peers on Tuesday following the publication of the UK’s latest jobs data.The country’s latest unemployment rate printed in line with market expectations in the three months leading up to October, and came in at 4.3%.

However, the latest average earnings (excluding bonuses) index exceeded expectations in the same time period, and rose from 4.9% to 5.2%, ahead of a more modest 5% estimate.

The acceleration in the UK’s latest wage growth data served to dampen Bank of England (BoE) interest rate cut bets on Tuesday, which underpinned Sterling sentiment throughout Tuesday’s European session.

The Euro (EUR) traded in a wide range on Tuesday, down against several of its counterparts but held steady elsewhere, following the publication of a duo of impactful data releases from within the Eurozone’s largest economy.

Firstly, Germany’s latest Ifo business climate index came in below market expectations on Tuesday, and marked the lowest reading since May 2020, hobbling the common currency.

However, Germany’s latest Zew economic sentiment index exceeded market expectations, and rose to a four-month high, capping some of the Euro’s losses.

Forecast: Inflation in the Spotlight

Looking ahead, the primary driver of movement for the Pound Euro exchange rate looking at Wednesday will likely be the publication of both the UK’s and the Eurozone’s latest inflation readings.

Looking at the UK, the latest consumer price index (CPI) for November is forecast to report a rise in both headline and core inflation.

Should the data print as expected, GBP exchange rates could continue to strengthen during mid-week trade should the data further undermine Bank of England interest rate cut bets.

Turning to the Euro, the Bloc’s finalised CPI data for November is expected to report that headline inflation edged higher while core inflation remained the same.

Should the data print as expected, this could also offer some marginal support to the single currency moving into Wednesday’s European session.

This content was originally published on ExchangeRates.org.uk