The jobless rate across the thirteen nation eurozone remained unchanged at 6.9% through August at the lowest level ever, according to figures released today.

In the official EU Eurostat figures released today, the number of people out of work in the eurozone remained at a constant rate for the third consecutive month at its lowest level since early 1993 when the survey commenced.

Since reaching the heights of 8.9% three years ago, unemployment throughout the eurozone has fallen significantly to reflect the strengthening of the underlying economy, and in particular a marked turnaround in the fortunes of the German economy with demand for exports gaining strength.

The region’s largest economy had been experiencing sluggish performance until a turnaround saw it prop up eurozone-wide growth and overall output alongside a similar turnaround in fortunes from within the French economy since the election of President Sarkozy.

Importantly the sub-prime lending crisis seems not to have had any real effect on the health of the eurozone economy, with no indication as of yet that there could be any slowdown or overly prejudicial credit crunch environment.

The recent unrest in trading markets saw growth rates for the eurozone slashed by 0.1% down to 2.5%, as a reflection of the potential impact of a tighter credit environment and less favourable business conditions makes itself known throughout the eurozone.

The European Central Bank, responsible for determining eurozone monetary policy, are scheduled to meet imminently to determine the course of interest rates over the next month. It is predicted at present that rates will be held to allow current conditions to continue, although eventually it is predicted that rates will begin to rise to ease inflation.

In the wider European Union, unemployment was also down by 0.1% point to 6.7% in August, although only thirteen nations fall within the eurozone single economic entity.

Tags: European Economy News by stewart
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The euro has enjoyed yet another significant trading session against the dollar, which has seen its value edge close to the $1.43 mark off the back of investor anticipation of more Federal Reserve interest rate cuts.

The dollar weakened yet further in Asian trading amidst fears that negative US data due this week could prompt the Federal Reserve to cut interest rates even further when they meet this month, a move that would cause further devaluation of the dollar across the globe. The dollar has seen significant losses since the Reserve cut rates by 0.5% points last month.

Meanwhile the value of the euro continued to ride high with anticipation of the European Central Bank maintaining interest rates at their current 4% level when their policy committee meets this week, which will continue to support the current strength of the euro against the dollar.

In Asian trade today the euro was up to $1.4283 against the dollar, edging ever closer to the landmark $1.43 figure. However, should prolonged strength in the euro become a more permanent fixture, businesses within the eurozone trading abroad may find themselves in significant difficulties.

Plane manufacturer Airbus have already issued a warning that a rate of $1.45 for the euro could lead to extensive job cuts, as it eventually becomes priced out of its market and is forced to cut fares.

The strong euro means that those trading in export goods outwith the eurozone, even within the EU, are facing uncompetitiveness and weaker sales in the short term, with unemployment a probable side effect.

Whilst many have called for eurozone interest rates to be cut amidst ongoing fears of the strong currency valuation, it is thought that Jean Claude Trichet will refrain from making any such announcement as he delivers the ECB’s verdict later this week, with the threat of inflation and overheating very much a primary consideration.

Tags: Exchange Rates News, ECB: European Central Bank News by stewart
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