THE TAKEAWAY: German unemployment rises 7,000, rate remains at 6.8%-> German Labor Agency says they see signs of a weakening market-> Euro trading lower
More Germans found themselves without work for the fourth month, as unemployment was up 7,000 in July. However, the unemployment rate was still 6.8% for the eighth straight month, which is the lowest unemployment rate in at least twenty years. There are now a total 2.89 million Germans without jobs according to the Federal Labor Agency, and all the unemployment numbers came in line with expectations.
The German Labor Agency said they see signs of a weakening labor market following today’s release. The rising unemployment plus the declining retail sales, which was released earlier, attest to the German economy’s struggle with the Euro-zone debt crisis. Following ECB President Draghi’s pro-Euro comments last week, investors are still waiting for further confirmation of a possible Italian and Spanish bond purchase program that would have the ECB and EFSF buy the countries’ debt in primary and secondary markets.
EURUSD fell into a decline for today’s session following the higher unemployment. The pair is currently trading below 1.2260 and further volatility could be expected after the Euro-zone unemployment rate, which is set be released in the upcoming hour. Support could be provided by 1.2234, the 50% expansion from May’s high to June’s low.
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