Euro Below $1.36 On Poor Unemployment Figures

The euro dipped below $1.36 on Thursday morning after disappointing data out on Wednesday increased speculation that the European Central Bank will make a bold policy move at next week’s meeting. The common currency traded at $1.3599 at 6:30 GMT,  near a three month low.

Unemployment data out on Wednesday from both Germany and France, the bloc’s largest economies, showed a rise in the number of jobless people. The figures came just days after European voters expressed their disappointment with the region’s progress by casting protest votes for extreme, anti-euro parties in several countries. The vote created some political uncertainty within the eurozone, but moreover provided concrete evidence that social unrest could become a real problem if things don’t improve.

With consumer prices on the decline and unemployment figures still at record highs, most investors are expecting to see the European Central Bank make a big policy move at its June 5^th meeting. The prospect of further easing or some type of stimulus plan has kept the euro in check as the bank’s actions will likely weaken the common currency.

However, the bloc did produce some encouraging news on Wednesday when the European Commission reported that inflation expectations among consumers and businesses increased. According to Reuters, the Commission’s report indicated that morale rose in the eurozone’s largest economies, with the exception of France, as more and more people began to believe that the bloc’s recession was coming to an end. The bloc’s economic sentiment index increased to 102.7 in May, up from April’s 102.0 reading and surpassing economists’ expectations of 102.2