Euro is losing ground against some of its counterparts as the latest economic data is released throughout the 18-nation currency zone. Even though Germany’s CPI reading met expectations, the country had to slash its growth forecast.
The latest CPI data out of Germany indicates that inflation remains at 0.8 per cent month-to-month. This was an expected reading, so it’s not out of character and has little bearing on the euro’s performance today.
However, the news that policymakers have lowered the growth forecast for Germany is a different story. Germany is revising its expectations to 1.2 per cent annual growth for 2014 and for 2015. This is a change from an expected 1.8 per cent for 2014 and 2.0 per cent for 2015.
With this change in growth forecast for Germany, it is apparent that the rest of the eurozone could be affected, since Germany is the largest economy in the 18-nation currency region, and generally considered the economic leader. The news is weighing a bit on the euro, causing it to fall against the dollar and the pound, which are both poised for more positive changes in the near term.
At 10:25 GMT EUR/USD is down to 1.2645 from the open at 1.2648. EUR/GBP is down to 0.7937 from the open at 0.7959. EUR/JPY is up to 135.6620 from the open at 135.5100.
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