This morning we have the latest unemployment figures for the Eurozone which could have a big impact on EUR exchange rates. We have already heard that unemployment in Germany was marginally better than expected while in Italy the unemployment level had risen so it will be interesting to see what the overall level is for the single currency economy. Two of the key economies in this announcement will be Spain and France both who are suffering economic difficulties, with Spain in particular facing staggeringly high unemployment levels which has hampered their economy for some time now. High unemployment is a reprucussion of recession with many analysts suggesting that high unemployment remains for about 2 years once an economy exits recession and considering the Eurozone is still not by any means out of the woods we could see unemployment a long running issue for many of the European economies. As is probably quite self explanitory high unemployment is bad news for that economies currency and so should we see a high reading today it may spark some further Euro weakness while any improvement on the expected figure of 12% unemployment (significantly higher than the UK’s 7.2%) may lead to a bit of EUR strength. The unemployment figures are announced at 10am this morning.
Australian Interest Rates Kept On Hold
Very early this morning we have heard that the Reserve Bank of Australia (RBA) decided to keep interest rates on hold at 2.5% and then followed this news with an announcement from RBA Governor stating that he expects there will be a period of stable interest rates indicating we are unlikely to see any change in interest rates down under possibly this year. This announcement may bring some confidence to the Australian economy and so could provide some support to the AUD, especially after a number of interest rate cuts over the course of last year which were designed to weaken the AUD in order to help improve their export market. So, now any change in interest rate changes have been ruled out we may see a more stable Australian Dollar and so for any clients looking to transfer AUD it will be important to keep a close eye on the exchange rates as any spikes could be short lived.