Spain Unemployment Hits Record High – Euro Movement Remains Indecisive
January 24, 2013 9:51 am in Forex Fundamentals and News
The unemployment data released today by National Statistics Institute in Madrid showed that Spain’s unemployment jumped up to 26.02% in the 4th quarter of 2012. This is a record high at least since 1976. This casts dark shadows on the outlook of the country which had seen a very controlled unemployment during 2001 to 2008 when the average unemployment rate was close to 10%. Prior to this the jobless rate had gone very high during July 94 when it had hit the level of 24.22% but was controlled before reaching 25% level.
Spanish unemployment level – historical view
Spain has been implementing aggressive austerity measures to balance the budget. The fifth round of spending cuts of 2012 had started in the 4th quarter of 2012. The measures include increase in the sales tax, cuts in unemployment benefits, public sector jobs and wages. The effect of the same was expected to result in the further recession and rise in the unemployment.
According to Eurostat total number of unemployed people in Euro area were 18.82 million in November 2012. With the number of unemployed people rising to 6 million, Spain has become the home of one third unemployed workforce of the Eurozone.
Euro’s movement against the U.S. dollar remains indecisive as it has been since the markets opened this week. After the markets opened on Monday, EUR/USD moved in tight ranges between 1.3300 to 1.3332 for over 30 hours of trading. A break of that range resulted in quite volatile moves which have been failing to show any clarity of direction. Since then the currency pair had gone to a high of 1.3371 before a fall to 1.3266. The subsequent rise saw it touching 1.3354 before another fall to 1.3264. The indecisiveness did not end there as the pair again rose to 1.3347 before falling again to 1.3286 and then jumping again to 1.3342. The only consistence is that the highs are getting lower and that is indicating an underlying bearish mood in the overall indecisiveness.