The latest data out of Germany is leading to subdued trading by the euro. Concerns about the eurozone economy are still a big part of the picture for the 18-nation currency, and Germany’s lackluster data isn’t helping much.
Germany’s latest economic data showed that industrial numbers have slipped. Industrial output in Germany fell 1.8 per cent during the month of May, highlighting a drop that is the biggest in more than 24 months. This was a surprise to analysts, since they had expected the situation to remain unchanged.
As the largest economy in the eurozone, Germany is often seen as an important part of the euro equation. With Germany’s economy struggling, it is difficult for the rest of the 18-nation currency region to pull out of its funk. This reality is leading to a subdued euro in Forex trading. While the euro isn’t down entirely across the board, its performance hasn’t exactly been inspiring.
Euro is expected to remain generally weak going forward, with policy divergence from the United Kingdom and the United States. The latest data out of Germany does nothing to change that outlook, and ECB officials recognize that a period of low rates in the eurozone is likely to last for quite some time.
At 13:36 GMT EUR/USD is a little higher, at 1.3597 from the open at 1.3595. EUR/GBP is also gaining, to 0.7943 from the open at 0.7919. EUR/JPY is lower, dropping to 138.4960 from the open at 138.7550.
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