Week in FX Europe – Higher European Unemployment Could Force ECB to Cut Rates

France and Spain published record high unemployment as more people there look at the government for solutions to a prolonged crisis which is not helped by austerity measures. French president Francois Hollande has seen his popularity dropped after the figures came out as there is no clear plan of action from his government. Spain has the highest unemployment rate at 27% and has seen a reduction of its population as immigrant and Spanish nationals exit the country looking for better opportunities abroad.

In the UK the GBP recovered after the gross domestic product for the first quarter of the year showed a 0.3% growth. That broke the trend of contraction that had the British economy on the verge of a triple-dip recession. The pound advanced 1.67% versus the USD and 1.937% versus the EUR during the week.

Overall economic conditions in the Eurozone continue to deteriorate and senior sources at the European Central Bank have hinted that the next policy meeting might be the one where the bank cuts interest rates to boost economic recovery.



* EUR German Consumer Price Index
* USD Federal Reserve FOMC Meeting
* EUR German Unemployment Change
* EUR Euro-Zone Unemployment Rate
* CAD Gross Domestic Product
* USD Consumer Confidence
* USD ISM Manufacturing
* USD Federal Open Market Committee Rate Decision
* EUR European Central Bank Rate Decision
* EUR Euro-Zone Producer Price Index (YoY)
* USD Change in Non-farm Payrolls
* USD Unemployment Rate

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza