Over the past five days the Euro has put in a less than impressive performance against peers like the US Dollar and Pound as signs of economic faltering in the Eurozone lessened the appeal of its common currency.
Yesterday’s GDP reports confirmed that growth slowed in France, Germany and the Eurozone as a whole in the third quarter while Italy’s economy contracted.
The data adds to concerns regarding the stability of the Eurozone’s recovery and highlights how dangerously close the region is to recession.
One industry expert issued this pessimistic statement after the data was published; ‘The near-stagnation of the Eurozone economy in the third quarter underlines the fragility of the recovery and the growing dangers of a damaging bout of deflation in the region’.
But Markit’s chief economist was more upbeat about the situation, commenting; ‘The region’s periphery continues to show signs of reviving, and the region is on course to expand at a slightly stronger, though still modest, pace in the fourth quarter. The data go a long way to vindicate the ECB’s decision to cut interest rates to re-stimulate growth across the single currency area’.
While the Euro initially declined against the US Dollar in the aftermath of the data’s publication, the EUR/USD pairing went on to fluctuate as more American citizens filed for unemployment benefit then expected in the week ending November ninth.
The Euro is currently trading against the US Dollar in the region of 1.3454
Janet Yellen’s assertions also brought the likelihood of the Federal Reserve tapering stimulus into question.
Yellen, who is poised to take over from Fed Chairman Ben Bernanke, is an advocate of quantitative easing and has stressed the necessity of continuing to support the US economic recovery with accommodative fiscal policy.
That being said, before the North American session closed the US Dollar staged something of a rebound as the influential Yellen admitted that stimulus could not be continued indefinitely.
With inflation figures for the Eurozone due to be published at 10:00 GMT and US industrial/manufacturing data ahead the EUR/USD pairing may well experience further fluctuations before the weekend.
Euro (EUR) Exchange Rates
As of 07:05 am GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3454 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8367 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4407 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6229 <
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4079 <