YouTradeFX | Jul 16, 2012 04:11AM ET
First time claims for U.S. unemployment benefits unexpectedly showed a notable decrease in the week ended July 7th, according to a report released by the Labor Department on Thursday. The report showed that jobless claims fell to 350,000 from the previous week's revised figure of 376,000. On the other hand, the Federal Reserve Bank of San Francisco President John Williams said he expects the unemployment rate to remain at or above 8 percent into next year as the economy enters a period of slower job growth.
China’s growth slowed for a sixth quarter to the weakest pace since the global financial crisis, putting pressure on Premier Wen Jiabao to boost stimulus to secure a second-half economic rebound. Gross Domestic Product expanded 7.6 percent last quarter from a year earlier, the National Bureau of Statistics said today in Beijing.
Bloomberg News reported that Italy’s bond rating was cut and its negative outlook reiterated by Moody’s Investors Service as the euro area’s third-biggest economy faces higher funding costs, slower growth, and contagion risk from Greece and Spain. The ratings company lowered Italy’s government bond rating by two steps to BAA2 from A3 and said further downgrading is possible, according to a statement released in Frankfurt today.
EUR/USD: The EUR/USD was trading slightly higher at 1.22062 after China GDP data grew slightly less than expected. The pair is likely to fluctuate within the resistance level of 1.22497 and the support level of 1.21672 ahead of Italian € 5.25 B sovereign debt auction and Spanish CPI (MoM) data. Later in the day, the U.S. will be released the Core PPI (MoM) data and the Michigan Consumer Sentiment, which will be the risk events for the USD. Trading is expected to be sticky and there might be some market corrections following the massive losses registered this week. Sentiments and expectations that the Federal Reserve will introduce more stimulus measures will drive the market today. Investors should be prudent.
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