Cyprus is expected to see its economy ravaged and shrink by 8.7% this year according to Cyprus Central Bank governor Panicos Demetriades, a figure that was also forecast by the European Commission. The future decline of Cyprus will not be helped by the continuing weakness of the Eurozone, a weakness compounded by today’s data releases out of Greece and Italy.
Cypriot Finance Minister Ioannis Kasoulides said; “Cyprus’ bailout package was a “warning” and the country was turned into an experiment on how to handle too-big-to-fail banks, Cyprus “was allowed to serve as an experiment, answering the biggest question what to do about banks too big to fail?
‘The opportunity was offered for Cyprus to give the warning and the example for the rest,” he said.
“Unfortunately, it didn’t permit us to re-adjust all the wrongdoings of our economy, let’s say within a three-year period, instead of this brutal and overnight collapse of our banking system.”
Industrial output in Italy fell more than expected as the nation’s two-year long recession drags on.
Industrial production declined by 0.8% in March, making it 5.2% lower than in the same month last year. Economists had been a decline of 0.2%. The Italian economy- the third largest in the Eurozone- has shrunk by six consecutive quarters since mid-2011. If Italy’s GDP posts a decline, which it almost looks certain to do for the first quarter of 2013 it would make it the longest recession Italy has suffered from since World War Two.
Greek industrial output also fell again this time declining by 0.7% over the year to March. The figure was an improvement on February’s figure of a 4.3% decline. It may be better but just how much more can the Greek economy decline? Separately Greece’s statistics agency said the country has moved further into deflation. The consumer price index came in at -0.6% in April, compared with -0.2% in March.
The Euro has edged upwards against the majority of peers following the release of better-than-expected trade surplus data out of the Eurozone’s biggest economy, Germany. Germany’s trade data for March showed that the country posted a trade surplus for the third month in a row, rising to €18.8 billion from the €16.8 billion in February.
Despite the seeming improvement in the trade data, seasonally adjusted data showed that the trade surplus actually fell slightly to €17.6 billion from €17.7 billion in February.
Against the US Dollar the Euro has weakened after the ‘Greenback’ saw a surge in overnight trading as a result of positive jobs data in the USA.
Current Euro (EUR) Exchange Rates
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3032
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8442
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.2960
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.5608
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7673
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1845
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7716
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6406
(Correct as of 12:10pm GMT)