Euro Down Before Manufacturing and Jobs Data

By TraderVox.com

Tradervox.com (Dublin) – The euro has started the week on a low after increasing at the close of the week following the EU leaders’ decision to avail funds to recapitalize Spanish banks. The 17-nation currency fell prior to data to be released today shows the joblessness in the region increased to a new record. Further, another report is expected to show the region’s manufacturing contracted. There is speculation in the market that the ECB will reduce interest rate to boost growth in the region during its next rate decision meeting this week.

The European Central Bank has kept its interest rate at record low since December and it is expected to be lowered further from the current one percent to 0.25 percent on July 5. The euro had the biggest advance against the yen when the EU leaders announced their decision on June 29 as the region leaders sought to come up with decisive measures to curb the regions debt crisis. As the week started, economists are warning that investors should be wary of buying the euro as the outlook for the region remains bleak. Marito Ueda of FX Prime Corp. indicated that he wouldn’t advice on buying the euro at the moment but should wait to see the economic measures that will be taken in the region.

The euro started the week by dropping 0.4 percent against the dollar to trade $1.2620 in the Asian trading session from its close last week, and later traded 0.3 percent down against the dollar at the beginning of the London session. The 17-nation currency dropped against the yen by 0.4 percent in the Asian market in Tokyo to trade at 100.68 from last week’s close when it rose 2.2 percent. In the London session, the euro has dropped 0.5 percent against the yen to trade at 100.53.

The market is expecting jobless rate in the euro zone to make a 11.1 percent increase from May’s 11 percent. Markit Economics will probably confirm that the manufacturing index remained unchanged at 44.8.

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