FOREX Watch: Euro crashes on weak performance indicators
The euro was outperformed by the US dollar following divergent data releases from the Eurozone and United States. Germany, the common currency’s chief economic engine, showed signs of slowing down after posting better-than-expected performance indicators over the previous two weeks.
German unemployment figures failed to support the sinking euro in Thursday’s session, a sign the German economy isn’t recovering as rapidly as some market participants would like us to believe. German unemployment rose by 7,000 during August, missing expectations for a 5K drop, and well below the previous month’s unemployment drop of 7,000. In total, 32,000 more people were unemployed in August than the previous month, according to Germany’s Federal Employment Agency. The unemployment rate remained unchanged at 6.8 percent for the fourth consecutive month.
In a separate report, consumer inflation rose at an annualized rate of 1.5 percent, compared to expectations for 1.7 percent, according to Germany’s monthly Consumer Price Index.
In the United States, jobless claims for the week ending August 23 declined by 6,000 over the previous week, despite missing expectations by 2,000. Second quarter gross domestic product was revised up to 2.5 percent following an initial estimate of 1.7 percent.
The EURUSD tumbled to a low of 1.3221 in the European session before consolidating at 1.3238 in the North American trade. The pair lost more than three-quarters of a percent to fall through the 1.3274 and 1.3241 intraday supports. Like other currencies, the euro is experiencing broad declines in the face of a potential US-led confrontation with Syria. The Arab nation of 23 million has been the focal point of global trade for the past week, as risk-averse investors look for safer bets. The US dollar is the preferred safe haven for investors. On Thursday the dollar advanced another 0.62 percent to 81.92 against a basket of its chief competitors.
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