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...