- Euro advances strongly on unemployment results – Number of jobless falls in Germany and Spain
- Pound slides on worrying signs of UK economic health – Lloyds cuts thousands of jobs after ‘Brexit’
- US Dollar slumps as Fed holds interest rates – Potential for policy action in September
- German inflation stats due in near-future – US to release claims stats for mid-July
The Euro has managed a sustained climb against its peers recently, having been boosted in appeal by favourable unemployment rate stats.
The Pound has been unstable of late, with recent news appearing to indicate that the aftermath of the EU Referendum is having a detrimental impact on UK businesses.
The US Dollar has been in a similar position to the Pound, having been unsettled by the latest Fed interest rate freeze.
Eurozone Economic News: Euro Advances after Pair of Supportive Unemployment Results
The single currency has been on an overall uptrend recently, having risen by 0.3% against the Canadian Dollar (EUR CAD), 0.4% against the US Dollar (EUR USD) and 0.5% against the Pound (EUR GBP).
The source of this notable support has been both Spanish and German unemployment rate stats; in the former case, a decline in the Q2 unemployment rate from 21% to 20% has been seen. While around a fifth of the population remains unemployed, this outcome is still a step in the right direction.
In Germany’s case, while the actual unemployment rate of 6.1% has not changed in July, although the -7k drop in the number of unemployed has been better than the expected -4k reduction.
In further beneficial Eurozone news, both Spain and Portugal have avoided sanction impositions for repeatedly missed budget targets, with European Commission Economic Affairs Commissioner Pierre Moscovici stating;
‘Even symbolic sanctions wouldn’t have allowed us to correct what had happened in the past and would have been hard to understand by populations that have undertaken significant efforts in recent years. A punitive approach we didn’t feel would have been most appropriate at a time when people are questioning Europe’.
Pound Slumps on Lloyds Job Cuts while US Dollar Unsettled by Continued Fed Inactivity
The Pound has been a soft option against peers recently, having slipped by -0.2% against the US Dollar (GBP USD) and -0.5% against the Euro (GBP EUR) along with greater losses due to mounting economic uncertainty.
In an alarming headline, Lloyds has elected to cut around 3,000 jobs and close hundreds of branches in an effort to cut costs, ostensibly in at least a partial response to the EU Referendum result.
The US Dollar has also been a poor prospect of late, having made a gain of 0.2% against the Pound (USD GBP) but fallen by -0.4% against the Euro (USD EUR) in addition to other unfavourable movements.
The latest major news out of the US has consisted of the Fed’s July interest rate decision, which has resulted in a rate freeze as expected. In spite of this outcome, expectations are for a rate hike in September, when the Fed makes its next decision.
Future EUR, GBP, USD Forecast: Germany to release Inflation Data, US Claims to Follow
The rest of the day will bring the announcement of further Eurozone economic announcements, consisting primarily from the early afternoon’s German preliminary inflation rate stats for July.
At the time of writing, forecasts have been for a rise on both the month and the year, from 0.1% to 0.2% and from 0.3% to 0.4% respectively.
Also out later on from the single currency bloc will be a speech from European Central Bank (ECB) official Benoit Coeure.
From the US, the early afternoon is expected to bring the initial jobless and continuing claims results for mid-July. In both cases, the number of recorded claims is forecast to rise.
The next major UK announcement is due early tomorrow, in the form of the pessimistically-predicted GfK consumer confidence result for July.
Current EUR, GBP, USD Exchange Rates
The Euro Pound (EUR GBP) exchange rate was trending in the region of 0.8423 and the Pound Euro (GBP/EUR) exchange rate was trending in the region of 1.1873 today.
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1093 and the US Dollar Euro (USD/EUR) exchange rate was trending in the region of 0.9016 today.
The Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.3173 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.7595 today.