Euro is struggling today, thanks to a combination of light risk aversion and a weak German IP. The disappointments in economic data are weighing on the 17-nation currency a little bit, and resulting a bit of uncertainty, especially when combined with the other concerns plaguing the world economy.
Many analysts had expected to see German Industrial Production to rise by 1.0 per cent in November. However, when the numbers came in, German IP showed only growth of 0.2 per cent. Because German is so important to the eurozone economy, this is once again reviving recession worries for the 17-nation currency region. Additionally, there has been some concern that aid to Cyprus will be delayed.
Combine this news with the fact that many Forex traders tend to square long positions of an ECB announcement, and it’s little surprise that the euro is losing ground today, particularly against the US dollar. Many expect that the European Central Bank will keep interest rates steady, but there is some interest in hearing Mario Draghi’s policy announcement.
For now, at 13:40 GMT, EUR/USD is lower at 1.3045, down from the open at 1.3082. EUR/GBP is fairly steady, remaining at its opening level at 0.8148. EUR/JPY is actually a little higher, though, moving up to 114.5320 from the open at 113.8750.
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