Jobless rates weigh on euro

The euro is under pressure as the unemployment rate in the region remains above the 12% mark.

The euro is trading at $1.3586 against the dollar, down 0.2%, as the level of unemployment in the eurozone remained at 12.1% in November. This was in line with expectations but still highlights how little has changed in the region. More worrying is that the jobless rate in major eurozone counties like Italy and Spain is still rising, which has offset Ireland’s drop.

The European Central Bank will make its interest rate decision tomorrow at 12.45pm (all times London time). The consensus is to keep interest rates unchanged at 0.25%; dealers will be listening for clues from Mario Draghi at the press conference at 1.30pm.

The US revealed strong ADP employment figures which put further pressure on the euro. The report showed that 238,000 new private sector jobs were created when analysts were expecting an increase of 199,000. This could be an indication regarding the US unemployment rate on Friday.

At 7pm tonight, the Federal Reserve will release the minutes from its latest meeting, after which it was announced the stimulus package would be reduced. If tonight’s minutes are hawkish we could see the euro fall further. 

Spot FX EUR/USD chart

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