Euro Rebounds as French Protests Ease, and the Pound Jumps After UK Unemployment Falls to 4.7%

The euro rebounded slightly on Tuesday as the French protests eased overnight, and the pound jumped after UK data showed unemployment falls and signs of a recovery in the jobs market, Reuters reported from London. The yen also jumped, snapping a two-day drop, after an auction of longer-dated Japanese bonds drew record demand, pushing the dollar lower after it rose the day before.

None of the moves was large. All of them pointed the same way: after weeks in which France's crisis, Britain's budget anxiety and Asia's market selloff set the tone, Tuesday morning gave traders a few hours in which the news was merely mixed instead of bad.

France: a quieter night, a hard vote ahead

In France, authorities set curfews in several cities on Monday to curb nationwide anti-government protests which have plunged President Emmanuel Macron's final months in office into turmoil — the latest chapter in the unrest Previously has covered through the weekend, including the curfew decisions themselves and Macron's rejection of his interior minister's resignation.

The easing of the protests overnight was enough to lift the single currency off its lows, but France remains in the spotlight on Tuesday as the lower house is set to vote on the revenue section of the proposed 2027 budget. Concerns about France's long-term finances have pushed its bonds lower and weighed on the euro since the start of September. The euro was last up 0.2% on the day at $1.1231, after hitting its lowest since May 2025 last week at $1.1113.

Strategists were not calling a turn. “The worries in France are not going away anytime soon,” said Tommy von Brömsen, FX strategist at Handelsbanken, in the Reuters report. “The bearish view on France will stay for a while longer and there's much more euro weakness to be priced in.”

Britain: unemployment falls, vacancies keep falling

Britain's pound rose 0.4% against the dollar to $1.3350 after labour market data showed a resilient jobs market, the latest batch of data from the UK that surprised to the upside, Reuters reported. A separate Reuters report on the same release put sterling half a cent higher on the morning, at $1.3352, and up 0.2% against the euro.

The details explain both the rally and its limits. The unemployment rate dropped to 4.7% in the three months to August, its lowest since mid-2025, against a Reuters poll that had expected a weaker reading. Average weekly earnings, excluding bonuses, grew by 3.7% in the three months to August compared with the same period in 2025, the Office for National Statistics said, extending a gradual pickup since touching a low of 3.4% earlier this year — and beating the 3.6% increase economists had forecast. A preliminary measure of payrolled employees from Britain's tax office rose by 13,000 in September, and August's change was revised to a rise of 1,000, compared with a provisional estimate of a decline of 26,000.

But there were clear signs in Tuesday's data that the jobs market remains weak underneath the headline. Job vacancies in the three months to September fell to 691,000, from 704,000 in the three months to August — the first time the figure has gone below 700,000 since the three months to April 2021. Employers are holding on to the workers they have; they are not rushing to hire new ones.

Why a jobs report moves an interest-rate argument

The Bank of England is looking for signs that the energy price shock from the Iran war is turning into broader inflation pressure in the economy, including through demands for higher pay. A resilient labour market cuts both ways in that argument: it is good news for households, and it gives the central bank room to raise rates without fearing an immediate jobs collapse.

“The risk is that a resilient labour market gives the Bank of England both the room and the reason to raise interest rates again,” said Lale Akoner, global market strategist at eToro, in the Reuters report. “Sterling could benefit from rising rate expectations.” Analyst Chris Beauchamp of IG, quoted in live coverage of the release, put the market mood more bluntly, saying sterling was “rampant” after data that “caught the market on the hop.” Stephen Evans, chief executive of the Learning and Work Institute, sounded the caution that sits behind the headline: the labour market remains relatively flat overall, with around one million young people not in education, employment or training, and overall employment still more than two million short of the government's 80% employment-rate target.

The dollar, the yen, and the wider morning

The third leg of Tuesday's currency moves came from Tokyo. The yen jumped after an auction of longer-dated Japanese government bonds drew record demand — a sign that investors were willing to buy Japanese debt at current yields, which pulled the yen up and the dollar down. The U.S. dollar index, which measures the currency against a basket of six peers, was down 0.2% at 101.75, near the lower end of October's trading range, as pressure eased on the euro.

For Previously readers, the morning connects to two stories already moving on this side of the Atlantic: the Asia selloff the desk covered earlier Tuesday, in the report on the Kospi's 3.7% fall as the AI selloff deepened, and the heavy U.S. earnings week that opens later today. Currencies are where those stories meet first — and on Tuesday, for once, the meeting was calm.

What to watch next

Three events will test whether Tuesday's calm holds. The French lower house vote on the revenue section of the 2027 budget will show whether the government can pass money measures while the streets are still tense. UK inflation data, due Wednesday morning London time, follows the jobs report into the Bank of England's November decision. And the euro's level — still far closer to its May 2025 low than to comfort — will tell traders whether one quiet night in France was a turning point or just a pause.