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EUR/USD Update : Euro Jobless Fault Line Festers as Italy Scars Recovery



Good day forex traders and readers.

Unemployment is always crucial to an economy and as he Euro Zone recovers, we definitely need to monitor how the job markets are across the euro region. A growing concern is the difference between the resilent economies such as Germany and the weaker countries such as Spain.

In the meanwhile the EUR/USD continues to thread lightly with a slight bias to the downside. Typical of the start of a new trading week, investors are holding off pending new developments. Read more below from Bloomberg.

Jobs in Italy

Euro-area jobless numbers this week may lay bare a fault line scarring the region’s recovery as evidence of Germany ’s employment muscle contrasts with the political quagmire destroying work in Italy.

While the currency bloc’s longest-ever recession has ended, unemployment held at 12 percent in September, according to the median of 36 forecasts in a Bloomberg survey of economists. Within that data lies a rift between two of its largest economies, with Italy’s rate seen by economists to have reached 12.3 percent, the highest since records began in 1977 — and more than double Germany’s comparable level.

Italy will “critically determine the fate of the euro area” and the region won’t prosper if that country can’t restore economic growth, European Central Bank Executive Board member Joerg Asmussen said last week. Italian officials predict joblessness in the euro zone’s third-biggest economy will keep rising, against a backdrop of a fragmented coalition jeopardized by the legal woes of former premier Silvio Berlusconi .

“We are still in a very discouraging situation for most of the euro area,” said Anatoli Annenkov, an economist at Societe Generale SA in London . “That’s particularly true for Italy, where politics has come to a rest and necessary structural reforms are not kicking in at all.” German Unemployment

The extra yield investors demand to hold Italy’s 10-year debt instead of similar-maturity German bunds stood at 246 basis points today, little changed from 247 basis points on Oct. 25. That compares to a 2013 high of 361 basis points on March 28. The euro traded near a two-year high against the dollar before the Federal Reserve begins a two-day meeting tomorrow.

The European Union’s statistics office in Luxembourg will publish euro-area labor data at 11 a.m. on Oct. 31. That’s the day after Germany’s Federal Labor […]

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