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Euro Steady at $1.30 Despite Rising Unemployment

ByBenzinga
AuthorBenzinga
Published 06/03/2013, 08:39 AM
Updated 05/14/2017, 06:45 AM
ACT
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The euro began the week steadily at $1.30 on Monday morning even after data revealed that unemployment across the region was still climbing. With the European Central Bank policy meeting approaching on Thursday, many are wondering if the bank will take further action to help kick start the region's economy.

Data out on Friday showed that eurozone unemployment rose to a record high at 12.2 percent. Countries that received bailouts posted even higher jobless rates, with Spain and Greece topping the charts with more than 25 percent of their populations unemployed.

Also concerning was youth unemployment, which has been a growing problem for the region. The latest data showed that 24.4 percent of people under 25 were unemployed, which translates to around 3.6 million people.

The dismal unemployment data came one week before a much anticipated European Central Bank meeting at which some are expecting a bold move from the region's finance ministers. Following May's meeting, where eurozone finance ministers agreed to cut the interest rate to a record low, Bank President Mario Draghi claimed the bank was prepared to take the deposit rate below zero if need be. Cutting the deposit rate would mean banks were essentially penalized for holding large amounts of cash and could flood the markets with euros.

At a conference in Shanghai, Reuters reported that Draghi claimed that the eurozone was showing signs of stabilization and that he was expecting a very gradual recovery in the second half of the year.

Despite calls for looser fiscal policies, Draghi said that eurozone nations must follow through with structural reforms in order to maintain the recovery path and restore the eurozone's competitiveness.

BY Laura Brodbeck

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