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Euro gains ground after eurozone unemployment rate dips

By Neil Dennis

11:05, 2 December 2021

Euro bank notes
The euro has gained as joblessness falls – Image: Pixabay

The euro climbed on Thursday after the unemployment rate in the eurozone currency bloc dipped in October.

The single currency gained 0.18% to $1.1338 against the dollar and has climbed 1.3% against the greenback since hitting an 18-month low on 24 November.

The euro was up 0.26% against the yen, but fell 0.23% versus a rallying pound in early trading.

Unemployment data

Data from eurostat on Thursday showed that the rate of unemployment in the eurozone fell to 7.3% in October, from 7.4% in September, matching analysts’ forecasts. The unemployment rate for the European Union as a whole was stable at 6.7% in October.

In numerical terms, this meant that the number of people out of work in the eurozone fell by 64,000 in October, extending the decline from September’s 223,000 drop.

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AUD/USD_zero

0.67 Price
+0.700% 1D Chg, %
Long position overnight fee -0.0071%
Short position overnight fee -0.0011%
Overnight fee time 22:00 (UTC)
Spread 0.00006

GBP/USD

1.27 Price
+0.490% 1D Chg, %
Long position overnight fee -0.0047%
Short position overnight fee -0.0035%
Overnight fee time 22:00 (UTC)
Spread 0.00013

EUR/USD

1.10 Price
+0.310% 1D Chg, %
Long position overnight fee -0.0080%
Short position overnight fee -0.0002%
Overnight fee time 22:00 (UTC)
Spread 0.00006

USD/JPY

147.50 Price
-0.690% 1D Chg, %
Long position overnight fee 0.0111%
Short position overnight fee -0.0194%
Overnight fee time 22:00 (UTC)
Spread 0.010

Downward path

“Unemployment is clearly on a downward trajectory, having fallen in each of the past six months,” said Melanie Debono, senior Europe economist at Pantheon Economics.

She added: “We look for a fall in the eurozone jobless rate to 7% at the end of 2021, smashing through March 2020’s record low of 7.1%. We then expect the rate to continue to decline, to below 6.5% over the coming years.”

Inflationary pressures

The euro was also supported on Thursday by data showing soaring producer price inflation, rising to an annual rate of 5.4% in the eurozone in October, up from 2.8% in the previous month.

Price rises for energy was the biggest contributor, up 16.8%, while intermediate goods rose 1.4% and durable consumer goods added 0.5%.

Read more: Inflation and supply issues mar UK manufacturing growth

Markets in this article

EUR/JPY
EUR/JPY
162.147 USD
-0.631 -0.390%
EUR/USD
EUR/USD
1.09933 USD
0.00342 +0.310%
EUR/GBP
EUR/GBP
0.86618 USD
-0.00152 -0.180%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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