EURUSD was higher by 0.14% on Tuesday as traders digested GDP growth data and German jobs.
Germany saw a more significant drop in unemployment, and European GDP was better than expected.
EURUSD – Daily Chart
The euro versus the US dollar rose to 1.0865 on Tuesday as it aims for the recent high at 1.0920. However, another important data day awaits Wednesday with Eurozone growth and a Federal Reserve interest rate meeting.
According to Labor Office figures on Tuesday, Germany’s unemployment rate was stable in January. The Federal Labour Office said the number of people out of work fell by 15,000 in seasonally adjusted terms. Analysts had been expecting a slight rise of 5,000.
The number of unemployed in Germany fell to 2.5 million at the beginning of the year, which is a five-month low and helps to repair the jump from June 2022, as Ukrainian refugees became eligible for jobless benefits.
The labour market has been an essential driver of the German economy’s resilience over the last few years, said Carsten Brzeski, head of macro at ING.
“A combination of fiscal stimulus, furlough schemes and demographic change seems to have made the German labour market almost invincible,” Brzeski said.
“The labour market remained stable at the beginning of the year,” said Andrea Nahles, chairperson of the Federal Labour Office.
The EURUSD edged higher on Tuesday, but traders are awaiting a GDP growth number for the eurozone and, more importantly, the latest FOMC interest rate meeting.
The eurozone was boosted by GDP growth on Tuesday, which showed a 0.1% jump in Q4. That is a poor performance, but it was higher than the -0.1% drop traders expected.
Tomorrow will see the latest ISM manufacturing data for the United States, followed by the latest FOMC rate meeting. Traders expect a 0.25% interest rate hike, but all of the attention will be on the press conference.
