Euro Finds Support From Falling Unemployment And Higher Inflation, US Dollar Steady
Frankfurt-Germany (Nov 29) The euro rebounded today after finding support from the fall in the unemployment rate to 12.1% while inflation rose 0.9%. More support was provided by S&P’s improving outlook for Spain’s growth and higher credit rating for Cyprus.
US dollar is trading since yesterday in a limited range as volumes were thinner-than-usual with US markets being closed yesterday on Thanksgiving holiday while today the US bond and stock markets will witness an early closing on Black Friday.
The euro advanced during the European session after unemployment in the region fell to 12.1% compared with expectations of 12.2%; meanwhile, inflation rose more than expected to 0.9% which is the highest in two months.
These readings however limit the chances for the European Central Bank to provide more stimulus to support the economy, suggesting that the central bank may keep its monetary policy unchanged or probably raise the interest rate by 0.50%.
Another support for the euro was provided by Standard & Poor’s which raised the credit rating for Cyprus and raised its growth outlook for Spain especially after the later managed to growth during this year’s third quarter.
At 12:12 GMT +3 the euro was trading around 1.3608 against the US dollar, with the highest seen at 1.3621 and the lowest at 1.3597 while the opening was at 1.3606.
Technically, the euro/dollar pair is trading around the resistance level 1.3620 which if breached it will target the 1.3695 and continue north.
The dollar/yen pair continues to move in a tight range with the US markets being closed yesterday for Thanksgiving holiday; yet the pair has the tendency to head north with the US investors returning to the markets today but with an early closing due to Black Friday.
At 11:45 GMT +3 the dollar index was trading around 80.55, with the highest seen at 80.63 and the lowest at 80.50 while the opening was at 80.55.
The Japanese yen fell against the US dollar to its lowest level in four months today after government data showed Japan`s inflation accelerated.
At 12:15 GMT +3 the yen was trading around 102.29 against the US dollar, with the highest seen at 102.61 and the lowest at 102.11 while the opening was at 102.29.
Technically, the dollar/yen pair is trading below the resistance 102.60, which if manages to stabilize below it, the 101.30 support level will be tested, which if breached the pair will continue south.