Euro surges as jobless rate falls below 10%

The Euro surged on the foreign exchanges yesterday, heading decisively away from parity with the dollar. It climbed to $1.0250 from a low of $0.990 on Friday.

The Euro surged on the foreign exchanges yesterday, heading decisively away from parity with the dollar. It climbed to $1.0250 from a low of $0.990 on Friday.

The move came after new figures showed the European jobless rate has fallen below 10 per cent for the first time in seven years, while German industry enjoyed a massive jump in orders in October.

The European Central Bank continued its campaign for structural economic reform in the Euro-11 countries.

Christian Noyer, the ECB's vice-president, said: "There are important conditions to be met to achieve a substantial and sustained increase in output growth and lower unemployment."

But he added: "Markets should not get the feeling that no structural reforms are taking place in Europe."

Criticisms of German government policy by Wim Duisenberg, the ECB president, put the skids under the single currency at the end of last week. But yesterday the currency markets reacted favourably to new economic statistics.

The unemployment rate in the Euro-11 fell to 9.9 per cent in October from 10 per cent the previous month. It was the first time the rate had fallen into single figures since December 1992.

Separately, German figures showed a 3.2 per cent jump in manufacturing orders in October, reversing a drop in September.

Analysts predict the jobless rate will continue to fall. The next month's figure for Germany is due today.

In addition, the yen weakened to above Yen105 to the euro, from last week's low of Yen102, following figures showing a surprise decline in Japan's GDP in the third quarter.

National output fell 1 per cent during the quarter although it was also 1 per cent higher than a year earlier.

On the other hand, the figure for growth in the second quarter was revised sharply higher, to 1 per cent from 0.1 per cent.