(MENAFN– ecpulse) Market consensus is looking for an unchanged inflation and unemployment numbers from the euro area – a sign the 17-nation economy could be stabilizing through the second half of this year.
Just one day before the European Central Bank’s policymakers meet in Frankfurt, the European statistics office, Eurostat, is expected to deliver an unchanged numbers for both July CPI inflation estimate and June unemployment rate. The forecast came as follows:
- CPI Estimate (YoY) (July) 1.6% vs. 1.6%
- Unemployment Rate (June) 12.2% vs. 12.2%
The intolerable surge in jobless rates in the euro area is becoming the major challenge for European economies against a strong recovery. Consumer spending remains weak and so the layoffs are becoming more evident across the major sectors amid the growing budget cuts as part of bailout program, requested by some euro members, like Portugal and Greece.
Inflation , on the other hand, is expected to see an unchanged annual rate of 1.6 percent in June – below the ECB’s inflation goal of 2.0 percent, boosting expectations of near interest rate cut if signs of economic deterioration emerge during the upcoming period.
Policymakers at the ECB are scheduled to meet on Thursday to set the next direction of monetary policy, where expectations signal the Governing Council will leave the rates unchanged. ECB President Mario Draghi reiterated the monetary policy will stay accommodative for an extended period of time.
Therefore, expectations are running high for ECB to stay on hold in July, but today’s data could adjust the tone for the ECB if we see a surprisingly new record-high in euro-area unemployment rate, which could strip the single currency off its gain against the dollar.
As of 10:27 GMT, EUR/USD was little changed at 1.3256, after hitting an intraday high of 1.3268 and low of 1.3257.
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