The Euro had a mixed week after the single currency region was hit by renewed concerns over the Euro crisis. Improvements were seen in the French and Italian PMI’s but Germany’s came in weaker-than-expected. Unemployment in Italy beat expectations rising to 12.2%.
On Tuesday the Euro weakened against the US Dollar and Sterling after unemployment continued to rise in May. The number of people out of work in the Eurozone has now surpassed 26.405 million and the number of people under the age of 25 out of work exceeded 5.5 million.
Joblessness in the Euro zone has been rising almost without interruption since early 2008, when the financial crisis began, declining only briefly at the beginning of 2011. Analysts see little prospect for a sustained decline in the jobless rate anytime soon, a view that weighed upon the single currency.
Thursday, the Euro was close to a monthly-low against the US Dollar and Pound ahead of the European Central Bank’s latest monetary policy meeting. It was expected that ECB President Mario Draghi will say that the Bank’s policies will remain accommodative, which he did. The single currency declined for a second-day about concerns over the stability of the Portuguese government and reignited fears over the Eurozone debt crisis.
By the end of the week the Euro strengthened against the Pound after the Bank of England made dovish comments and maintained rates at the record low level of 0.5%. Fears over a breakdown of the Portuguese government have been allayed adding support to the Euro.
The single currency is likely to weaken over the course of the session however as the markets await the release of the latest US jobs data. Also weighing upon the currency is the release of data which showed that France’s trade gap widened in May.
Major events next week for the Euro
Wednesday 10th July – German Consumer Price Index (yoy) – 06:00
Thursday 11th July – ECB monthly report – 0800
Friday 12th July – Eurozone Industrial production data – 09:00
Euro Exchange Rates (as of 10:15 am GMT)
The Euro is trading against the Pound in the region of 0.8590
The Euro is trading against the US Dollar in the region of 1.2875
The Euro is trading against the Australian Dollar in the region of 1.4062
The Euro is trading against the New Zealand Dollar in the region of 1.6459
The Euro is trading against the Canadian Dollar in the region of 1.3572
The Pound is trading against the Euro in the region of 1.1640
The US Dollar is trading against the Euro in the region of 0.7766
The Australian Dollar is trading against the Euro in the region of 0.7110