GBP/EUR reached highs not seen since February 2020 on Monday and is still rallying and testing the psychological 1.20 handle.

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Yesterday, the Bank of England announced its latest monetary policy decision, opting to hold interest rates at their current level of 5%.

Employment data on Friday showed mixed results. US non-farm employment change beat forecast for a 5th straight month, but average hourly earnings fell 0.1%, and the unemployment rate gained 0.2% against forecast.

The euro rose on Monday reaching the highest level against the dollar since April 2022 as several European Central Bank officials signalled the bank will continue with its aggressive rate hikes.

Data early Tuesday morning showed that the UK unemployment rate edged higher to 3.6% in September, while average earnings rose 5.7% on the month, climbing at the fastest pace in more than 20 years.