EUR/GBP rises to near 0.8800 following UK jobs data, German ZEW Survey eyed

• EUR/GBP appreciates as the Pound Sterling declines following weaker UK labor data.
• UK ILO Unemployment climbed to 5.0%, while Employment Change data arrived at -22K in the three months to September.
• The Euro finds support from the European Central Bank's cautious stance on its policy outlook.

EUR/GBP rises after halting its four-day losing streak, trading around 0.8800 during the early European hours on Tuesday. The currency cross appreciates as the Pound Sterling (GBP) loses ground following the release of the United Kingdom (UK) labor market report. Traders shift their focus toward Germany's ZEW Survey data due later in the day.

UK ILO Unemployment rose to 5.0% in the three months to September after reporting 4.8% prior, against the market expectations of 4.9%. The Employment Change data arrived at -22K in September versus 91K in August.

UK Average Earnings, excluding bonuses, in the three months to September, edged higher by 4.6% following a 4.7% growth booked previously. The market consensus was for a 4.6% reading. Meanwhile, Average Earnings, including Bonus, increased by 4.8% in the same period after accelerating by 5.0% in the quarter through August. The data missed the estimate of 4.9%.

The EUR/GBP cross also draws support as the Euro (EUR) receives support from the cautious tone surrounding the European Central Bank (ECB) policy outlook. Traders anticipate the ECB will keep interest rates unchanged for now, backed by steady economic performance and inflation near target. Money markets see only a 40% chance of a rate cut by September 2026.

ECB Vice President Luis de Guindos said Monday that current policy rates are appropriate, emphasizing the need for the bank to stay "very prudent and cautious," despite reduced uncertainty following a recent US-EU trade deal.