Here's your Daily Currency Update – 21 July 2026

• UK Employment Change beat expectations at +147K versus +85K forecast — a strong reading that provided an underlying floor for sterling.
• Unemployment Rate held steady at 4.9%, in line with forecasts.
• Average Earnings including bonus came in softer at 4.3% vs 4.5% expected — wage growth is cooling, which slightly moderates BoE tightening expectations.
• New Prime Minister Andy Burnham continues to shape his cabinet: John Healey appointed as Chancellor, with markets reading the transition as broadly continuity-oriented.
• ZEW Economic Sentiment data for the eurozone is due this afternoon — the first meaningful catalyst of the rest of the week.
• UK CPI lands Wednesday, ECB rate decision Thursday, UK Retail Sales and Flash PMIs on Friday — a busier second half to the week ahead.
• Current mid-market ranges: GBP/EUR €1.1625–€1.1730 | GBP/USD $1.3235–$1.3367.

Sterling demonstrated quiet resilience this morning as a mixed set of UK labour market figures landed without triggering significant volatility. The headline Employment Change print came in well ahead of forecast — +147K versus +85K expected — a meaningful beat that provided an underlying floor for the pound. The Unemployment Rate was unchanged at 4.9%, as expected. The softer element was Average Earnings: the wages-plus-bonus measure came in at 4.3% annually versus the 4.5% consensus, with private sector wage growth cooling noticeably. For the Bank of England, the data presents a nuanced picture — the labour market remains robust, but moderating pay pressure reduces urgency for a hawkish stance.

Away from the data, political developments continued to shape the domestic backdrop. New Prime Minister Andy Burnham has been appointing his cabinet, with John Healey named as Chancellor — a selection markets have read as signalling fiscal continuity and a focus on household cost pressures. The tone from Downing Street has been measured, and sterling has reflected that: contained, calm, and waiting for its next catalyst. That may not be far off — ZEW Sentiment is due this afternoon, UK CPI lands on Wednesday, the ECB decides on Thursday, and UK Retail Sales and Flash PMIs round out the week on Friday. Plenty to keep markets occupied.

• Strong UK employment data provided an underlying floor for sterling, limiting euro upside during the session.
• The cross has drifted from near 1.18 since last Thursday as the euro found some support and the political transition introduced mild caution.
• Softer wage growth slightly tempered BoE rate expectations — a modest restraining influence on GBP that capped the move higher.
• ZEW data this afternoon and UK CPI on Wednesday are the next pair-specific catalysts; support near 1.1620, resistance around 1.1750–1.1800.

• UK employment strength provided support; the dollar lacked a strong directional catalyst in a quiet US session.
• Mixed wages data capped sterling's upside but didn't reverse the modest positive move — the net result is a pair holding near the upper end of its recent range.
• Burnham cabinet appointments added a minor domestic monitoring premium, but sparked no sharp reaction.
• UK CPI on Wednesday is the key domestic driver; US ADP employment tomorrow adds a transatlantic dimension.

• The euro showed little directional conviction against the dollar, consolidating as markets awaited fresh catalysts.
• Divergence from GBP was evident — UK-specific labour resilience gave sterling a relative edge that the euro did not share today.
• ZEW economic sentiment (15:00 today) is the most immediate catalyst; Thursday's ECB decision is the week's key event for this pair.
• Fed/ECB policy expectations remain the medium-term driver — any shift in ECB language on Thursday could move the pair materially.