Eurozone Unemployment Rate Holds Steady at 6.4% in August

The number of people unemployed fell by 94 thousand after declining by 114 thousand in July.
Compared with August 2023, the number of unemployed fell by 233 thousand, improving from a 190 thousand drop in July.
Spain remained at the top of the unemployment chart, with an unemployment rate of 11.3% in August, down from 11.5% in July.
Notably, France had an unemployment rate of 7.5% in August (July: 7.5%), while Germany’s unemployment rate stood at 3.5% (July: 3.5%).
Malta had the lowest unemployment rate among the Euro area nations, standing at 3.0%.

Eurozone Unemployment and the ECB Rate Path

The Eurozone’s August unemployment rate may continue supporting investor bets on an October ECB rate cut. September’s softer inflation numbers for France, Germany, and the Eurozone have intensified speculation about a 25-basis point ECB rate cut.

Following Tuesday’s softer-than-expected Eurozone inflation figures and August’s steady unemployment rate, investors should monitor ECB commentary. ECB Chief Economist Philip Lane is on the economic calendar to speak today. Traders should consider his comments regarding the inflation drop below the ECB’s 2% target, labor market conditions, and views on an October rate cut.

EUR/USD Reaction to Eurozone Inflation

Before the unemployment report, the EUR/USD fell to a low of $1.10537 before climbing to a high of $1.10826.

However, following the unemployment report, the EUR/USD dropped slightly from $1.10720 to a low of $1.10634.

On Wednesday, October 2, the EUR/USD was down 0.01% to $1.10669.