Euro Drops Against Most Majors
Thursday, the euro plunged against its U.S., Japanese and U.K. counterparts on the back of weak equities and as a report showed that Germany’s third quarter employment fell for the first time since 2005.
On the other hand, the euro strengthened to a new multi-week high against the Swiss franc as the latter weakened across the board.
Most Asian and European stock markets fell today as signs of weakness in the U.S. economy aggravated worries about the strength of the global recovery.
Earlier in Asia, Japan’s Nikkei 225 stock average lost 127.33 points, or 1.3 percent, to 9,549.47 — its seventh straight day of decline as investors succumbed to jitters about a possible glut of new bank shares after Mitsubishi UFJ announced its capital raising plans. The bank’s shares fell 3.7 percent.
Elsewhere, Hong Kong’s Hang Seng fell 0.9%, India’s key index was down 1.3%, Taiwan’s benchmark shed 0.1 percent and Indonesia’s market was 0.6 percent lower.
In Europe, Britain’s FTSE 100 index lost 0.3%, Germany’s DAX fell 0.5% and France’s CAC-40 dropped 0.4%.
The Federal Statistical Office of Germany said the number of persons in employment decreased by 0.2% or about 81,000 year-on-year in the third quarter compared to a 0.1% rise in the second quarter. During the quarter, there were 40.4 million employed persons. The statistical office said the third quarter decline in employment was the first since the corresponding period in 2005.
Compared to the previous quarter, employment grew 0.4% or by 149,000 persons in the third quarter, which was around 50% smaller than the average increase recorded for the corresponding periods over the past three years, the statistical office said. After seasonal adjustments, employment was down 0.1% sequentially in the third quarter.
The euro, which closed yesterday’s trading at 133.69 against the yen fell to a new multi-week low of 132.08 in early deals on Thursday. The next downside target level for the euro-yen pair is seen at 131.7.
Japan’s all industry activity dropped a seasonally adjusted 0.6% month-on-month in September, compared to the 0.9% increase in the previous month, the Ministry of Economy, Trade and Industry reported today. This was the first monthly decline in all industry activity since March 2009, when the index slumped 1.6%. Economists had expected the index to remain flat in September.
On a yearly basis, all industry activity plunged 7.1% in September, faster than the downwardly revised 6.7% decrease in the preceding month.
During early deals on Thursday, the euro slipped to a 2-day low of 1.4845 against the dollar. This may be compared to yesterday’s close of 1.4963. If the euro-dollar pair weakens further, it may target the 1.482 level.
The euro declined to 0.8904 against the pound in early trading on Thursday. On the downside, 0.884 is seen as the next target level for the euro-pound pair. At yesterday’s close, the pair was quoted at 0.8937.
UK retail sales rose 0.4% month-on-month in October, the Office for National Statistics said today. Economists had forecast 0.5% rise. In September, retail sales rose 0.4%, upwardly revised from zero growth reported previously.
Compared to the same month of the previous year, retail sales grew 3.4% in October, more than the expected 2.9% growth. The statistical agency revised September’s growth to 2.9% from 2.4%.
In early trading on Thursday, the euro jumped to a new multi-week high of 1.5148 against the Swiss franc. The next target level for the euro is seen at 1.5175, if it strengthens further. The euro-franc pair was worth 1.5112 at Wednesday’s close.
Switzerland’s trade surplus in October rose to CHF 2.46 billion from CHF 1.91 billion surplus recorded in September, the Federal Customs Administration said today.
Exports rose 0.1% month-on-month on a seasonally adjusted basis after falling by an upwardly revised 1.9% in September. Meanwhile, growth in imports eased to 0.6% from an upwardly revised 3.2% in the previous month. On an annual basis, exports were down 15.9% and imports plunged 10% in October.
Traders are now likely to focus on the New York session, in which the U.S. weekly jobless claims for the week ended November 14, leading indicators for October and the results of the Philadelphia Federal Reserve’s manufacturing survey for November are expected to influence trading.
