Positive Eurozone Data Not Enough To Lift The Euro
The euro was set to finish the week below $1.35 with a strong economic report keeping it from sinking any lower. The common currency traded at $1.3473 at 6:50 GMT. The U.S. dollar also benefited from good economic news.
On Thursday, a business activity report from the eurozone showed that both Germany and France saw an increase in transactions. The upbeat report gave investors reason to believe the European Central Bank could hold off on further quantitative easing, but most think one report will not be enough to change the bank’s opinion on the region’s modest recovery.
However, the likelihood of additional sanctions against Russia in the wake of the downed Malaysian Airlines plane kept a lid on the euro. Although outraged over the crash and the European identity of many of the victims, the bloc is struggling with how to enact stricter sanctions but avoid any major impact on the European economy. Since Russia is a major trade partner for most eurozone nations, the inability to do business with Russian firms could be crippling.
Related Link: Euro Remains Below $1.35 On Lackluster Eurozone Data
Meanwhile the dollar continued its climb, fueled by another data point suggesting the economy is back on track: the nation’s jobless claims. The Wall Street Journal reported that initial jobless claims fell by 19,000 to 284,000 last week, an eight-and-a-half year low. The report added to speculation that the U.S. Federal Reserve could raise its interest rate sooner than expected; Fed Chair Janet Yellen has said that the labor market’s improvement would play a vital role in determining when the bank can tighten its policies.
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