Euro to Pound Sterling (EUR/GBP) Exchange Rate firms on manufacturing and unemployment data

The Euro firmed against the Pound on Friday as Eurozone manufacturing and unemployment data came in better than forecast. Sterling meanwhile was softened by a weaker-than-expected construction PMI report.

Data released by the European Union’s Statistics agency Eurostat showed that the number of people out of work in the 18-member Eurozone fell slightly in March to bring the overall unemployment rate to 11.8%, beating forecasts for a figure of 11.9%.

The data shows that around 18.9 million people are out of work in the region, that figure fell by 22,000 in March.

The data highlights disparity between the nations worst hit by the Eurozone crisis. Germany and Austria posted unemployment levels of around 5% whereas Italy’s jobless rate is around 13% and Spain’s is close to 25%.

“The cross-country divergence is still very, very significant, much more so than in other data, there is a lag right now which is usual, but unless there is another shock to the economy, the unemployment rate should decline,” said a senior Eurozone economist at Credit Agricole.

The Euro to GBP exchange rate is trading around 1.2171 – 11:50 am GMT, 02/05/14
A separate report showed that manufacturing activity in the Eurozone improved in April. Growth in the sector was once again led by Germany but Spain and Italy also saw their manufacturing sectors expand.

According to Markit’s data the Eurozone’s manufacturing PMI increased to 53.4 in April. Up from the 53.0 figure recorded in March and was better than forecasts for a figure of 53.3.

“The Eurozone PMI paints a promising picture for the regions manufacturers at the start of the second quarter. The recovery is becoming more broad-based and therefore hopefully more sustainable, as rising demand for each member state feeds growth in other countries,” said Chris Williamson, chief economist at Markit.

The market’s attention is now focused on the release of the eagerly anticipated US nonfarm payrolls data due for release later in the session.