German Unemployment Rises for the 5th Month
THE TAKEAWAY: German unemployment rises by 9K in August, more than expected -> Unemployment indicates pressure from the debt-crisis -> Euro rises following Chinese commitment
The number of people looking for work in Germany rose for the fifth straight month in August. The unemployment change was 9 thousand, beating expectations for a 7 thousand rise in unemployment, and remaining steady with July’s revised unemployment change. The unemployment rate remained at 6.8% for the ninth month in a row, according to the Federal Labor Agency.
The total number of jobless Germans rose to 2.9 million in August from 2.89 million. The Federal Labor Agency said the weaker economy has weighed on the labor market. The German economic growth was reported to have slowed to 3% in the second quarter, although the unemployment rate still sits at a two decade low.
The German economy has been negatively affected by the Euro debt crisis, and measures to help solve the crisis like the ECB plan to purchase the debt of struggling countries or the creation of the permanent ESM bailout fund are unlikely to be decided upon until at least September.
Unexpectedly higher unemployment is usually currency negative, as it adds to the pressure on the ECB to cut its interest rate, but the Euro was not significantly affected by the release. EURUSD is trading higher in today’s trading following the announcement by Chinese Premiere Wen that his country will buy more European bonds. Resistance could be provided by a month-long upward trading channel, currently near 1.2600.
EURUSD 15-minute: August 30, 2012
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