EUR/GBP treads water above 0.8700, eyes on Eurozone GDP

EUR/GBP trades lower around 0.8710, extending losses for the second consecutive day. The EUR/GBP pair continues to soften after the employment data from the United Kingdom (UK).

UK Claimant Count Change revealed that the claims for jobless benefits have reduced to 17.8K in October compared to the previous figures of 20.4K. Claimant Count Rate remained consistent at 4.0%. Employment Change declined by 207K in September against the 82K decline previously. Additionally, the UK ILO Unemployment Rate (3M) remained the same at 4.2% in September.

Pound Sterling (GBP) experienced a boost following the release of the UK preliminary Gross Domestic Product (GDP) data, which surpassed expectations last Friday. This positive development suggests that the UK may have avoided a recession in 2023.

However, it's worth noting that the situation remains precarious as the UK still teeters on the brink of a stagflation scenario following the elevated inflation levels alongside a higher unemployment rate, posing challenges for the overall economic landscape.

Traders are adopting a cautious approach, choosing to wait on the sidelines in anticipation of key data from the Eurozone. The upcoming Eurozone preliminary Gross Domestic Product (GDP) figures for the third quarter (Q3), set to be released in the European session on Tuesday, could trigger volatility in the market.

Projections suggest a contraction of 0.1% in the quarterly growth number, while the annual growth number is estimated to expand by 0.1%. Positive economic data from the Eurozone could potentially provide support to the Euro (EUR) against the British Pound (GBP).