Euro to Dollar (EUR USD) Exchange Rate Lower - US Jobless Claims Remain Below 300K

October 10, 2014 - Written by James Fuller

STORY LINK Euro to Dollar (EUR USD) Exchange Rate Lower - US Jobless Claims Remain Below 300K

The Euro vs Dollar exchange rate trended lower on Thursday after US Jobless Claims data was favourably received.

Furthermore, the Eurozone saw more bad news on Thursday after German data failed to meet economists’ expectations. The German Trade Balance showed the surplus dipped to 10.3B Euros in August, from 20.1B in July.

Flailing Eurozone Recovery causes Euro Softening

The Eurozone recovery has flat-lined of late with Thursday’s German Trade Balance data adding to the list of below-forecast reports. With economists and investors fearing that the 18-nation economy may fall into recession, weak figures from powerhouse Germany offered the Euro no support. Exports flopped by 5.8% in August, the largest fall since January 2009 when the global economic crisis was at its peak. Economist Carsten Brzeski stated: ‘The economy seems to need a small miracle in September to avoid a recession in the third quarter.’

US Dollar Exchange Rate Volatile as Fed Rate Hikes Debated

The US Dollar has experienced a week of fluctuations as investors revised their rate hike expectations. Wednesday saw the release of Federal Reserve meeting minutes in which central bankers suggested that they felt cautious about raising interest rates in the near future. The minutes also reinstated that rate increases would be fuelled by positive US data. Consequently, Thursday’s figures have lifted the US Dollar to Euro exchange rate.

Initial Jobless Claims were below the forecast figure of 295K, instead coming in at 287K. Furthermore, Continuing Claims figures saw 2381K jobseekers continuing to look for work instead of the predicted 2410K. Thursday has seen the fourth consecutive Initial Jobless Claims figure under 300K, the most impressive streak since 2006. Economist Guy Berger commented: ‘Apparently the labour market remained in solid shape in early October.’

Meanwhile, others are convinced that the US economy could be approaching an influx of low jobless stats. Economist Joseph LaVorgna commented: ‘The labour market is entering into a potential boom.’ The fourth quarter could see the labour market tightening substantially. ‘With the pace of firings exceptionally low, and surveys signalling robust hiring, we have to expect very strong payroll growth [in the fourth quarter]’ said Economist Ian Shepherdson.

The Euro to US Dollar exchange rate may see some movement from both Federal Reserve and European Central Bank (ECB) officials speaking in Washington at the International Monetary Fund (IMF) conferences. ECB President Mario Draghi is expected to speak on European economic health, whilst Federal Reserve Governor Daniel Tarullo will speak about Bank Regulation. Furthermore, Fed Governor Stanley Fischer will discuss the Global Economy.

Friday will be a relatively quiet day for both the US and Eurozone in terms of data, leaving movement in the EUR to USD currency pair reliant on statements from central bankers and any shift in global politics.

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TAGS: Daily Currency Updates Euro Forecasts