Euro to US Dollar Exchange Rate Tumbles As US Jobs Data Beats Forecasts and Greece Defies European Commission

Modified: Thursday, 7 May 2015 15:36 BST - Written by James Fuller

STORY LINK Euro to US Dollar Exchange Rate Tumbles As US Jobs Data Beats Forecasts and Greece Defies European Commission

The Euro weakened against the US Dollar after a positive jobless claims report reduced fears that the world’s largest economy is experiencing a broad slowdown. The Euro meanwhile was weakened by weaker-than-forecast data out of France and Germany, and as news broke that Greece has defied the European Commission by setting up red lines on pension and labour market reforms.

The Euro had been higher against the US Dollar earlier in the session as the American currency remained under pressure from disappointing ADP jobs data released in the previous session.

The Euro held onto gains even as data showed that German factory orders increased below forecasts. The German Economy Ministry said that orders were up by 0.9% over the previous month after declining by the same amount if February. Economists had been expecting orders to increase by 1.5%.

‘The positive business climate and the increase in domestic demand speak in favour of a continued upward trend in manufacturing. Even so, sluggish demand from abroad made for a weak start into the year. Orders dropped by 1.5% in the first quarter from the October to December period,’ said the Ministry in a statement.

Data out of France also disappointed as it showed that the nation’s trade deficit widened in March from February as oil imports increased in both number and price. The Eurozone’s second largest economy saw its deficit widen from €3.6 billion to €4.6 billion. Also released was a report, which showed that French industrial production, contracted by 0.3% in March as the production of energy and water declined. Economists had been forecasting for a decline of 0.2%.
As the session progressed the US Dollar turned stronger against a basket of major peers, as data showed that the number of Americans filing for unemployment benefits increased by a less than expected level last week.

According to the Washington based US Department of Labour, the number of initial benefit claimants in the week ending May 2 increased by 3,000 to 265,000 from the preceding week’s total of 262,000. Economists had been forecasting for the number of claimants to rise by 18,000 to 280,000 last week. The data eased concerns over the strength of the U.S. job market after payroll processing firm ADP said on Wednesday that U.S. non-farm private employment rose by 169,000 last month, below expectations for an increase of 200,000.

The Euro could make more declines against the US Dollar if eagerly anticipated Non-Farm Payrolls data comes in positively.

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