The Euro is trading at its highest-level in a month against the Pound and has climbed to its highest level in over two years against the US Dollar as the single currency was boosted by news that Italy’s industrial sector posted its best output increase in more than two years, increasing hopes that the region’s economic recovery is finally starting to take off.
The Euro also continues to be supported by last week’s decision by the European Central Bank to not introduce further stimulus measures. The Central Bank chose to leave interest rates at the record low level of 0.5% and chose to not introduce further stimulus measures in an effort to stave off the threat of deflation in the region.
The data out of Italy showed that capital spending in the country soared by 3.9% in January, suggesting that both foreign and domestic companies are keen to increase their investments. As well as the hike in investment industrial production jumped by a more than expected level and wiped out the previous months disappointing decline.
According to Istat the national statistics institute that compiled the data, output in the Eurozone’s third largest economy climbed by 1% on a monthly basis and by 1.4% year-on-year, beating forecasts for figures of 0.22% and 1.3% respectively. Spain also posted positive output data as yearly industrial production beat forecasts.
There was mixed data out of France. Industrial production in the region’s second largest economy fell more than forecast month by month and was down from the previous months figure on a year-by-year basis. A separate report into investor sentiment also came in below expectations and Greece’s inflation and balance of trade reports both showed declines compared to the previous month.
The mixed picture for the Eurozone shows that there is still a long way to go before the region can say it has attained a sustained recovery, but as has been the trend in recent months economists choose to favour the positive news and tend to shrug off the bad.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3888 ,
Euro,,British Pound,0.8328 ,
Euro,,Australian Dollar,1.5345 ,
Euro,,Canadian Dollar,1.5430 ,