Sterling down vs. euro after jobless data

The pound eased back against the single currency yesterday, losing 0.35 cents despite improved risk appetite in markets.

• It was confirmed yesterday morning that Britain’s unemployment rate has surged to a 12 year high. The UK jobless rate now stands at 7.6%, with it expected to peak next year around the three million mark.
  
• Official data out of the eurozone revealed that inflation during June was negative for the first time since the single currency was introduced in 1999 – analysts are not expecting the 16-country bloc to remain in deflationary territory for very long however.
  
• The FTSE 100 enjoyed another good day with the blue chip share index rising by 2.6% to close at its highest close in four weeks. Equity markets around the world were boosted by strong US corporate earnings data, with the Fed also stating that the economy will grow between 2.1% and 3.3% in 2010.
  
• Sterling is again sluggish in early trading this morning with little economic data out of the UK or the eurozone today. Investors will keep a keen eye on US corporate earnings and the direction of equity markets for the time being.