Homepage » News » EUR/GBP » Euro Exchange Rate News: EUR/GBP near 2-Week Low as German Data Disappoints Again

Euro Exchange Rate News: EUR/GBP near 2-Week Low as German Data Disappoints Again

European Map

The Euro to Pound (EUR/GBP) exchange rate weakened close to its lowest level in a fortnight as data out of Germany once again disappointed and raised fears that the Eurozone’s largest economy is sliding towards recession.

Earlier in the session, the Euro had been finding support from the weekend’s results of European Central Bank (ECB) stress tests on 150 European financial institutions. The report came back more positive than expected by showing that 25 banks, overall, were found to be short of the capital needed to survive a new financial crisis. The report also concluded that thirteen banks would still need to create €9.5 billion in extra capital, a number that was at the lower end of economist forecasts.

Any strength given to the Euro afforded by the stress test result was quickly erased after the latest business confidence data out of Germany declined for a sixth consecutive month, raising fears that the nation is sliding towards a recession.

According to the Ifo institute, its business climate index fell to a reading of 103.2 in October, a drop from the 104.7 reading recorded in September. The new number now suggests that business confidence is at its lowest level since December 2012, the height of the Eurocrisis. The decline was slightly biggest than economist forecasts for 104.5.

Ifo economist Klaus Wohlrabe said that he expects there to be zero growth in the fourth quarter in Germany and that there are no positives for the nation’s industrial sector.

‘Things have not gone well for German industry and there are no bright spots for industry,’ said Wohlrabe.

Is the Eurozone Heading for a Triple Dip Recession?

‘The latest numbers from the industrial sector are very worrisome. The third quarter was probably worse than expected, the economy may have stagnated at best,’ said Joerg Kraemer, chief economist at Commerzbank AG.
Sanctions against Russia and the instability in the Middle East have had a huge impact on the German export sector and with the overall weakness in the wider Eurozone things look set to get worse.

The IFO Expectations reading also fell more than forecast by easing from September’s reading of 99.3 to 98.3. The IFO Current Conditions also dropped from 110.5 to 108.4.

Germany’s economy expanded by 0.7% in the first quarter of the year, but then contracted by 0.2% in the three months to June. The country is to release data on third quarter growth next month.

Euro Exchange Rate News:

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.2682 ,
Euro,,British Pound,0.7872 ,
Euro,,Australian Dollar,1.4414 ,
Euro,,Canadian Dollar,1.4252 ,

As of 12:30 pm GMT