Latest Unemployment Report Can’t Help Euro

Pessimism is strong today, and the euro is heading lower as a result. Even a drop in the number of people claiming unemployment in July isn’t helping the euro. The 17-nation currency remains lower as uncertainty prevails, and as signs of growth in the US economy continue to support the greenback.

Eurostat reports that the number of unemployed in the eurozone declined by 15,000 in the month of July. The decline, though encouraging, didn’t budge the unemployment rate, which is stuck at 12.1 per cent for yet another month. Plus, even though the overall numbers of unemployed dropped in the eurozone, the news wasn’t so great for one demographic group: Youth. Those under 25 saw an increase in unemployment for July.
The lackluster numbers indicate that economic recovery will continue to be slow. When compared with the progress the United States is making, the eurozone appears sluggish — and that doesn’t help the euro. Mario Draghi continues to say that the ECB interest rate will remain at 0.5 per cent for a long time.
Also weighing on the euro is general risk aversion due to the geopolitical situation.
At 13:42 GMT EUR/USD is down to 1.3214 from the open at 1.3241. EUR/GBP is down to 0.8533 from the open at 0.8540. EUR/JPY is down to 129.8460 from the open at 130.2250.

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