Eurozone Unemployment Rate Ticks Lower, Youth Rate Hits Record High

Eurostat, the European Union's statistics office, reported on Friday that the unemployment rate across the 17 countries using the euro currency fell to 12.1 percent in October from the record high level of 12.2 percent in September.

In the eurozone, a total of approximately 19 million people are unemployed.

Youth Unemployment Soars

While the eurozone unemployment rate fell slightly in October, eurozone youth unemployment reached a record high of 24.4 percent, with 3.58 million people under the age of 25 unemployed. In Spain, youth unemployment rose to 57.4 percent with 28.8 percent of the total population unemployed. In August Greece's youth unemployment rate reached 58 percent.

Inflation Rises

Eurostat also reported on Friday that the annual rate of eurozone consumer inflation rose from 0.7 percent to 0.9 percent beating expectations of 0.8 percent. The European Central Bank target for inflation is just below two percent.

Earlier this month, the ECB cut its benchmark interest rate from 0.5 percent to a record low of 0.25 percent amid concerns over low inflation and sluggish economic growth.

The better than expected data on inflation has dampened speculation that the ECB will cut rates again at their policy decision and news conference next week.

Euro Reaction

The euro traded higher on Friday, nearing a one-month high against the US Dollar and reaching a five-year high against the Japanese Yen, after the news of better than expected eurozone inflation and employment data.

EUR/JPY Monthly Chart

Looking at the EUR/JPY monthly chart we can see that price has rallied to the highest levels since October of 2008. The 61.8 percent Fibonacci level forms potential resistance above at 140.90. Momentum indicator RSI show a reading of 69, approaching potentially overbought conditions.
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BY Dan Blystone