A pause in the US Dollar's recent rally helped to push the Euro away from the recently struck 16-month trough. Analysts say that FX traders should be wary, however, given the ongoing problems with the Brexit and the concerns over the proposals to the Italian budget which will likely limit any potential gains. After the standoff between the Italian government and the EU over Italy's spending plans, it has finally come to today's deadline for the re-submission of the budget. Whether the proposal continues to weigh on the Euro will depend on the degree of compromise that Italy is willing to offer.
As reported at 11:08 am (GMT) in London, the EUR/USD was trading at $1.12, a gain of 0.16% and moving off the session high of $1.12575. The EUR/GBP was trading at 0.8708 Pence, down 0.26%; the pair has ranged from a low of 0.87040 Pence to a peak of 0.87419 Pence.
Data Helps Lift Pound
As has been the norm for the past several months, concerns over the Brexit negotiations have weighed on the Pound. With no new good news on the Brexit front, market players look to economic data to gauge the Pound's short-term direction. In this case, the latest labor data has provided a lift to the Pound despite mixed results. The Office of National Statistics reported earlier that Average Earnings (including bonus) for the three month period through to September was 3.0%, up from the 2.8% of the previous period (which was revised up from 2.7%); that was in line with expectations. Excluding the bonus, the figures improve to 3.2%, up from the expected 3.1% and the last reading. The Claimant Count Rate was also lower, while the ILO unemployment rate moved to 4.1% unexpectedly, with 4.0% the consensus forecast. The GBP/USD was trading higher at $1.2907, up 0.44%; the range for today has been $1.2842 to $1.2918.