Record Low German Unemployment Rate Helps Push Euro Higher
- German Joblessness decreased by a seasonally adjusted 13k
- Unemployment rate unexpectedly fell to record low 6.3%
- Positive German PMI and Jobs data help push EUR/USD higher on short covering
According to the German Federal Labor Agency, Germany’s jobless rate fell to a record low 6.3% in November, the lowest level since the German reunification. The prior and expected reading came at 6.4%. The labor data showed joblessness declined by a seasonally adjusted 13K individuals, subsequently lowering the number of people unemployed, which now stands at a seasonally-adjusted 2.77 million. The number was above economist’s expectation for an increase of 5K individuals to the labor force, and the prior revised 6K reading. The data today suggests that the German labor market remains healthy on positive domestic demand, even though a slowdown in China and emerging markets puts negative pressure on German exports.
The figures today came together with generally positive Markit/BME PMI figures, and price action leading up to the number saw the EUR/USD push higher above the prior day’s high and the 1.0600 handle, which may have sparked short covering. The data seemed to have added fuel to the break higher, two days before the highly anticipated ECB rate decision in which the bank is expected to announce further QE, with the possibility of a deposit rate cut.