Eurozone Leaders Attempt to Cure Crisis Symptoms, Not the Disease
The dollar climbed on Friday morning ahead of data which is likely to show a better than expected rise in US consumer confidence in June.
The greenback, like most currencies, has been on a roller coaster since the US Federal Reserve announced that it would pull back on its stimulus spending.
Now, data like the consumer confidence data due out today is being closely monitored by investors who are trying to get a clearer picture of when the Fed will begin to taper its $85 billion per month bond buying plan.
According to Bloomberg, the Thomson Reuters/University of Michigan consumer sentiment index for June was 83, rather than the prior 82.7 estimate.
The euro remained at $1.30 on Friday morning after slipping on Thursday due to comments from European Central Bank President, Mario Draghi, which indicated that the bank would continue working to help support the region's struggling economy.
On Thursday, eurozone policymakers met to discuss how to alleviate the region's sky high youth unemployment rates and decided to allocate 8 billion euros to fighting the problem. The funds will help pay for a “Youth Guarantee” program, which helps young people find a job or job training within four months of graduation or unemployment.
Despite this new initiative, most aren't expecting to see any change in the bloc's record high unemployment rates. Targeting just youth unemployment could be treating the symptoms rather than the disease. Instead of simply treating youth unemployment, many believe the only way policy makers can improve the labor market is by creating growth in the eurozone's economy.
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