Euro-Zone Unemployment Rate Remains at a 10-Year High
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EUR/USD: The unemployment rate in the 16-member euro area for the month of May remained at a 12-year high for a third successive month. Figures from the Eurostat in Luxembourg showed that the jobless rate remained at 10.0 percent for the month, while economists were forecasting the rate to rise to 10.1 percent. Taking a look at the breakdown of the report, Spain posted the highest unemployment rate in Europe at 19.9 percent, while figures in Germany scaled back from 7.1 percent in April to 7.0 percent in May. Today’s figures from Spain adds additional weight onto the indebted country as Moody’s recently announced that it is placing the Spanish nation’s Aaa rating on review for a downgrade. As of late, market participants are beginning to price in this downgrade as the government accelerates fiscal consolidation, while battling higher borrowing costs. Also on the economic docket during the European trade was the producer price index. Prices rose 0.3 percent, extending the seven month advance on the back of higher energy costs. Looking ahead, the ECB is likely to keep rates unchanged at 1.00 percent for the rest of the year as consumer prices are expected to remain muted for the rest of 2010. To discuss this and other topics, please visit the EUR/USD forum.
Weekly Spotlight: Europe at Risk for a “Double-Dip” Recession by the End of the Year
Written by Michael Wright, Currency Analyst
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