The level of unemployment in the eurozone ticked up to 12.1% in May – ordinarily an increase in the number of people out of work would have a negative impact on the currency, but with economists expecting a worse reading of 12.3%, it actually had a positive bearing.
The euro was also given a boost by the latest manufacturing purchasing managers’ index (PMI), which came in at 48.8, a 16-month high. Any signs of recovery in the eurozone are positive for the region.
Traders will be looking ahead to the European Central Bank’s statement on Thursday, where economists expect eurozone interest rates to remain at 0.5%. If ECB president Mario Draghi discusses a stimulus plan, we could see the euro rally further versus the dollar.
Trading volumes are expected to be low during the week, with a public holiday in the US on Thursday. On Friday, if the latest US unemployment report shows a fall in the jobless figure, we could see EUR/USD decline.