EUR/USD Falls on Disappointing Unemployment Data

Downward pressure on EUR/USD increased after the latest reports showed that eurozone unemployment hit a record high (10.9%) and manufacturing output fell to a 34-month low (45.9). As well as the eurozone manufacturing and unemployment figures, the weekly ADP jobs data from the US also came in below expectations. The ADP survey showed that 119,000 new private sector jobs were created last week, much lower than forecasts of 177,000.

Today inverstos’ focus will be on the European Central Bank’s policy meeting and ISM Non-Manufacturing PMI report. With recently downgraded Spain looking to raise funds in the bond market today, the European Central Bank will be under pressure at its policy meeting to do more to protect weaker euro zone members from additional pain. The euro remained lower during the Asian session on bets that European Central Bank President Mario Draghi will hint at further stimulus measures to counter the region’s debt crisis after today’s policy meeting.

Meanwhile, the gulf between France and Germany, the eurozone’s two biggest economies, widens over tackling the debt crisis. Francois Hollande, the frontrunner to replace Nicolas Sarkozy as French president, said “It is not for Germany to decide for the rest of Europe. He said that if he becomes the new president, he will not pass the fiscal austerity pact agreed by the leaders of 25 European nations, unless it contains new measures to spur on growth. Forex trading may be more risky this week due to very heavy economic and political events schedule. Luxembourg Prime Minister Jean-Claude Juncker joined to discussion and said he’s stepping down as head of the group of eurozone finance ministers due to Franco-German interference in managing Europe’s fiscal woes. Jean-Claude Juncker said “France and Germany act as if they are the only members of the group”. A decision on replacing Juncker has been postponed until after the second round of France’s presidential election on May 6.

The Asian stock markets opened slightly lower. HANG SENG opened at 21,209.40, previous close was 21,309.10. SENSEX opened at 17,271.80, previous close was 17,301.90. The Tokyo Stock exchange is closed today.

EUR/USD is trading at 1.3144 by the time of typing and for today resistances are located at 1.3172 and 1.3224. Support levels are 1.3105 and 1.3054.

GBP/USD is at 1.6184. Resistance levels are located at 1.6236 and 1.6275. Supports are located at 1.6158 and 1.6080.

USD/CHF is trading at 0.9138 by the time of typing and for today resistances are located at 0.9166 and 0.9202. Support levels are 0.9119 and 0.9080.

AUD/USD is trading at 1.0305. Resistances are located at 1.0322 and 1.0385. Support levels are 1.0285 and 1.0252.

The economic calendar is heavy today. UK Services PMI data will be released at 09:00 GMT. ECB Interest Rate announcement is due at 12:45 GMT. U.S. Unemployment Claims, Non-farm Productivity and Unit Labor Costs data will be released at 13:30 GMT. U.S. ISM Non-Manufacturing PMI report will be released at 15:00 GMT.

0

Comments

Leave a Reply

Your email address will not be published.