Data showing a slide in Germany's jobless rate in July and a rise in euro zone economic sentiment this month also helped to support the single currency. An index of executive and consumer sentiment in the 16 euro nations increased to 101.3 from 99 in June, the European Commission in Brussels said today. That’s the highest since March 2008. The number of people out of work in Germany fell a seasonally adjusted 20,000 to 3.21 million, the lowest since November 2008, the Federal Labor Agency said. Stop-loss orders in the euro triggered above $1.3050 accelerated gains the currency's gains, market players said. Some in the market said California Governor Arnold Schwarzenegger's announcement that the state was in a state of emergency over its finances was another reason to dump the dollar as it highlighted the fiscal problems in the country.

 

Economists say data released tomorrow will show slowing U.S. gross domestic product growth. “The U.S. economy appears to be losing momentum, and that’s supporting the euro,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “Conditions following the stress tests have become more supportive for risk assets. That’s detrimental for safe-haven currencies.” “Sentiment is beginning to build that the U.S. economy is slowing as stimulus measures are being removed,” said Neil Mellor, a currency strategist at Bank of New York Mellon Corp. in London. “The U.S. is in a precarious position, fiscally speaking. There’s a steady drip of negative news that’s pushing people away from the dollar.”