Euro Rises After German Unemployment Data

Frankfurt (Apr 30)  The euro strengthened against other major currencies in the early European session on Thursday, as German Bund prices extended its rise. The common currency rose further after data showed that the German unemployment declined in April.

German government bond yields rose around 0.29% on Wednesday, the highest since December 2013.

The improvement in the Eurozone bonds hints recovery in the economy.

Meanwhile, the treasuries fell due to ECB's month bond-buying stimulus program announced earlier this month.

The bonds were low after the European Central Bank announced its quantitative-easing program in January. Markets expected the 10-year yields to fall into negative territory.

Data from the Federal Labor Agency showed that German unemployment declined less than expected in April. The number of people out of work declined by seasonally adjusted 8,000 to 2.79 million in April. It was forecast to fall by 15,000. The jobless rate came in at a record low 6.4%, the same rate as seen in March. In other economic news, data from Eurostat showed that Eurozone consumer prices remained flat in April as expected by economists after falling for four consecutive months. Consumer prices dropped 0.1% in March and 0.3% in February.

Eurozone unemployment rate remained unchanged for a second straight month in March, at its lowest level in nearly three years. The seasonally adjusted jobless rate was 11.3%, unchanged from both February and January. Economists had forecast a decline of 11.2%.

In the Asian trading, the Euro held steady against its major rivals. In the European trading today, the euro rose to more than a 2-month high of 1.1247 against the US dollar and nearly a 2-month high of 133.71 against the yen, from early lows of 1.1070 and 131.29, respectively. If the euro extends its uptrend, it is likely to find resistance around 1.17 against the greenback, and 137.50 against the yen. Moving away from early low of 0.7187 against the pound, the euro climbed to more than a 2-week high of 0.7266. The euro may test resistance near the 0.75 region. The euro edged up to 1.0506 against the Swiss franc, from an early low of 1.0429. On the upside, 1.07 is seen as the next resistance level for the franc.

Source: NewsEdge