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Euro Increases Against the US Dollar as Oil Prices Fall

By:
Peter Taberner
Published: Feb 2, 2016, 12:08 UTC

The euro has climbed in value against the US dollar over the past 24 hours, rising to buying just under $1.092 this morning GMT, yesterday the euro was

Euro Increases Against the US Dollar as Oil Prices Fall

The euro has climbed in value against the US dollar over the past 24 hours, rising to buying just under $1.092 this morning GMT, yesterday the euro was buying in the region of $1.085 GMT AM.

Declining oil prices have weighed heavily on the greenback, arresting the hike in Brent Crude oil in late January.

A barrel of crude did rise to $36, the highest the cost has been since the first week in January, now the prices have fallen back to $33.70 per barrel.

United States crude futures closed yesterday 6% down, and this was blamed on weak manufacturing figures from China, a large consumer of American oil.

According to government figures, activity in the Chinese manufacturing sector had contracted for the sixth month in a row, and were the weakest figures recorded since January 2012.

Their Purchasing Manager’s Index revealed as score of 49.4 for January, which was down from 49.7 for December.

Chinese economic uncertainty is again having a ripple effect on the well being of their trading partners. And is likely to effect the euro area as China is their second largest export trade partner.

Weak Economic Data for the United States Boosts the Euro

The latest Markit Purchasing Managers Index (PMI) for January, disclosed that there was an only a slight improvement in the United States’ manufacturing sector, as the index rose from 51.2 in December to 51.4.

The latest survey reading was the lowest that has been found in the index since October 2013.

Manufacturers remained cautious in terms of staff hiring according to the data, and companies were similarly reserved over their inventories, reflecting a lack of confidence in the industry.

Respondents to the index survey also revealed inconsistent patterns, as production volumes were thought to have improved at a solid pace.

And spending patterns, particularly from domestic clients, had increased, plus the sector was thought to have been boosted by the fastest business growth for three months.

At the same time, export sales only rose marginally for January, and deteriorating capital spending from the energy sector had reduced demand.

Positive Labour Figures for Germany

Official figures have revealed that year on year employment figures for December have increased by 441,000. From provisional calculations, it is estimated that there are 43.3 million people who are now employed in Germany.

The number of the unemployed was reduced by 6,000 compared to a year ago, and now stands at 1.9 million.

The figures may have been positive on a year on year comparison, but month on month in comparison to November last year, there was a 33,000 decrease in employment numbers.

Due to seasonal reason employment levels decreased in November, as employment levels were reduced by 173,000, or 0.4%.

The data for December told a different story, with the Christmas period helping employment figures rise by a month on month 43,000.

For the third quarter of last year, the German economy was growing at 0.3%, a 0.1% reduction from the previous quarter.

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