EUR/USD Exchange Rate Today: Euro Firms against US Dollar

Modified: Thursday, 12 February 2015 22:33 BST - Written by James Fuller

STORY LINK EUR/USD Exchange Rate Today: Euro Firms against US Dollar

The Euro made gains against the US Dollar after economic data releases out of the world’s largest economy disappointed and as news of a ceasefire in Ukraine buoyed sentiment towards riskier assets.

Data released by the Washington based Labour Department showed that the number of Americans filing for new jobless benefit claims increased by a bigger than forecast margin last week, despite that the trend in the labour market remained consistent with signs that it was continuing to strengthen.

The report showed that the number of Americans making claims increased by 25,000 to a seasonally adjusted figure of 304,000 for the week ending on February 7. The preceding weeks figures were also revised and showed that 1,000 more people than previously expected made initial benefit claims. Despite the rise in claimants, economists are not too concerned by the figures as on a monthly basis the Labour market is still performing well.

‘The trend in payrolls growth is likely still solidly over 200,000 per month, more than strong enough to keep the unemployment rate trending down,’ said Jim O’Sullivan, chief US economist at High Frequency Economics.
Putting more pressure on the US Dollar was a separate report, which showed that retail sales fell by 0.8% in the first month of the year. The fall adds to December’s drop of 0.9%, and marks the first consecutive run of declines since 2010. The cause for the fall in sales was the sharp decline in fuel sales (a result of weak oil prices) and a second monthly drop for car sales. The fall in sales is likely to raise concerns over the strength of the US economy, as consumer spending is its driving force.

‘With lower gasoline prices leaving households with more to spend...the labour market on fire and consumer confidence back at its pre-recession level, we had hoped to see a much stronger performance,’ said Paul Ashworth, an economist at Capital Economics.
The report did show that US Consumers did spend more last month at electronics, building materials and general merchandise stores. Restaurants and bars notched another month of solid business. Restaurant sales have jumped 11.3% in the past year.

The Euro meanwhile found support ahead of a meeting between European leaders in Brussels. Economists will be hoping that the talks will end in a solution for an end of the current Greek crisis. It also received support from news that a ceasefire deal was reached for Ukraine.

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