News Column

Euro Mixed After Eurozone Inflation, Jobless Rate

July 31, 2014

BRUSSELS (Alliance News) - The European currency showed mixed trading against its key counterparts in the European session on Thursday, after releases of Eurozone consumer price index in July and jobless rate in June.

Data from Eurostat showed that Eurozone inflation slowed in July to the lowest in four-and-a-half years, largely due to a fall in energy prices. Inflation slowed to 0.4% in July from 0.5% in June. It was expected to remain unchanged at 0.5%.

Separate data showed that the Eurozone jobless rate fell unexpectedly in June. The unemployment rate dropped marginally to 11.5% from 11.6% in May. The rate was forecast to remain unchanged at 11.6%.

In the economic news, the data from Federal Labor Agency showed that German unemployment declined more than expected in July. The number of people out of work declined by 12,000 from June. Meanwhile, the jobless rate remained unchanged at seasonally adjusted 6.7% in July as widely expected.

The euro rose to more than a 2-week high of 0.7941 against the pound, from an early low of 0.7913. The euro may test resistance near the 0.80 area.

Data from mortgage lender Nationwide showed that UK house price growth slowed in July, falling behind expectations of economists. House prices rose 10.6% year-over-year in July, increasing for the seventeenth straight month and followed a 11.8% gain in June. This was less than the 11.3% rise expected by economists.

Against the US dollar, the euro fell to 1.3382, from an early high of 1.3399. Continuation of bearish trend may lead the euro to a support around the 1.333 mark

Pulling away from an early high of 137.83 against the yen, the euro retreated to 137.60. If the euro extends its downtrend, it may find support around the 136.33 region.

Japan's housing starts declined less than expected in June, the data from the Ministry of Land, Infrastructure, Transport and Tourism showed. Housing starts dropped 9.5% year-over-year in June, a slower rate of decline than the 15% fall in May.

The euro retreated to 1.2162 against the Swiss franc, from an early high of 1.2175. The euro may test support near the 1.213 zone.

Looking ahead, Canada GDP for May, US weekly jobless claims for the week ended July 26 and Chicago PMI for July are due to be released in the New York session.

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Source: Alliance News

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