Euro Mostly Flat on Disappointing Data

Eurozone data continues to disappoint, leaving the euro mostly flat today. Even though euro is a little higher against the US dollar and the UK pound, gains have been somewhat insignificant so far. Concerns about recession in the eurozone are high, and there are still worries about sovereign debt.

Today, a lot of the focus in the eurozone is on the shrinking labor market. Employment continues to sink, falling by 0.2 percent in the fourth quarter of 2011. The situation hasn’t improved much since then, with eurozone governments focusing on cutting spending in order to reach deficit requirements, and business confidence waning. Economic news out of Germany, the eurozone’s largest and most influential economy, has also been disappointing.
On top of all that, there are still concerns about sovereign debt. Even though the Greek crisis was solved, there are worries about who might be next. Portugal and Spain continue to struggle.
Some progress has been made in the eurozone, though. The ECB‘s lending program has helped shore up the banks and improve confidence. Additionally, good news in the United States has been helping risk appetite — even though the euro has been largely left out of the party until today.
At 12:57 GMT EUR/USD is up to 1.0362 from the open at 1.3030. EUR/GBP is up to 0.8331 from the open at 0.8316. EUR/JPY is lower at 108.9350, down from the open at 109.0455.

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