Eurozone Inflation Unchanged at 0.5 Percent

The euro began the week on a strong note trading at $1.3651 as speculation that the European Central Bank would implement a large-scale quantitative easing program faded. The common currency was also helped by a weakening dollar, weighed down by last week's disappointing data. Last week, US first quarter GPD was revised down to reveal a shocking 2.9 percent contraction in the first quarter. Although it was common knowledge that the nation struggled in the first quarter, most didn't expect such a steep drop. Shortly after the GDP data was released, a disappointing consumer spending report came out, further weighing on the nation's growth expectations. Most analysts began to revise their second quarter growth estimates to reflect the softer spending, which in turn brought the dollar lower. Later this week unemployment figures are expected to bolster the greenback with non-farm payrolls data due out a day early on Thursday due to the Independence Day holiday on Friday. Reuters reported that most are expecting the report to show that US employers added 210,000 new jobs in June. If the jobs report meets expectations and the unemployment rate remains unchanged, markets will likely see the dollar rise. Meanwhile the euro regained some momentum on Friday when German inflation figures came in above expectations. The figures raised hopes for positive eurozone inflation for June, but the region's inflation remained flat at 0.5 percent. Although not overly positive, the fact that inflation remained stable and did not drop further will likely reduce some of the pressure on the European Central Bank to introduce a large scale quantitative easing program this year.