Euro Drops ahead of German Key Figures. Latest Currency Market Update

Yesterday the EUR closed trades at 1.4769 versus the USD, the weakest level for the last two weeks. On Tuesday the European currency was at 1.4802, a little bit lower from Monday 14-month high of 1.5064 per Dollar on Monday morning. The EUR/JPY was 135.88, lower from 137.08 on the currency market.

The European currency drop is described by concern on negative German unemployment data due to be released tomorrow. The reading is expected to be 8.3 percent in the month of October, a 0.1 percent drop from September figures. Also the separate researches show that commodity and stock market is likely to peak as recovery in the USA seems to be fragile.

Among today`s important events in economic calendar the major one is the German CPI figures likely to deliver worsening of consumer prices. The Euro will probably lower a little bit moving away from 1.500 level versus the USD.

14-Month Low for the Dollar

The USD reached its 14-month low versus the EUR as investors choose higher yielding assets for trading abandoning dollars. On Tuesday the EUR/USD reached the top of $1.4828 and ended trades at $1.4786. The last time when these results were seen was August 2008. Gold seems to be the most attractive asset for trading.
The investors looking for high yield ignored pessimistic Euro-Zone economic data to ensure the better-returning Euro to $1.50. It seems that this level will be attained shortly.

The greenback may drop even more today before the government reports its forecast to deliver consumer prices rose last month. This report is one the most important economic events for today.

Find more information on Forex currency market at Forex Trading Website.

Consumer Confidence in UK Reaches Its 18-Month High

According to U.K. Nationwide Building Society, consumer confidence index rose to 71, its highest point for the last year and a half. Such an increase adds to recovery signs showing that the U.K. economy is on its way to complete growth.
Tomorrow Bank of England is supposed to announce its further direction of the monetary policy probably keeping its benchmark interest rate at its current low in spite of all signs that the recession fades away.

Economic reports last week appeared to deliver positive information. Thus, U.K. house prices have already reached its last year levels showing the end of shrinking in house sector. Consumer spending rose by 3 percent to 103 level.

Some positive news from labor market in Great Britain: the measuring of hiring for jobs inclined to 51.3 in September, from 50.6 in August.

American Unemployment Rises

American job market remains now the worst problem zone in the US economy. 263,000 Americans lost their jobs in September much worse than expected by the market analysts. The major losses are seen now in services and construction industry. Thus, the unemployment rate in September is 9.8 percent from the active part of the population. Last month the jobless rate was 9.7 percent. Current result has been considered as the lowest one for last 26 years. 10 percent mark will probably be attained by the end of the year.

Worse than expected employment data have stopped and reversed the USD upside trend. This had traders questioning the US economy recovery and pushed them away from trades with dollar in the list of their financial operations.

ECB`s Decision Spurs the EUR for a Jump

Yesterday the ECB announced it would lend banks 75.2 billion euros for a year term at the current interest rate of 1%. The number appeared to be lower, than it was anticipated by the experts. The EUR/USD currency pair achieved the level of 1.4634 from 1.4581 point marked on Tuesday. Loose economic policy measures encourages traders who use trading software to choose risky assets for trading.

The unexpectedly low PMI report added to a mixed results of U.S. data released Wednesday, including an improved second-quarter U.S. GDP report, but disappointing U.S. jobless claims, confirming investors' speculations that a sustained economic recovery won't take hold.

The GBP has continued its further falling against other currencies traded on the Forex currency market, unable to shake off the comments by Mervyn King Bank, the Bank of England governor that a weak Pound would be an advantage for the U.K.'s recovery from the global downturn. In today's trading the GBP is at $1.5942 versus the USD.

Today the ministers of finance of EU countries meet in Sweden to discuss further direction of the European economy.