Although a measure of investor confidence for the Eurozone surprised expectations by advancing from 11.9 to 13.3 in February instead of declining to 10.1, the Euro adopted a patchy relationship with its US counterpart.
During the local session the common currency lost ground against several of its major rivals as less-than-impressive industrial production data for France and Italy lessened the Euro’s appeal.
French industrial output fell by 0.3 per cent at the close of last year following a revised gain of 1.2 per cent in November. Manufacturing output in the Eurozone’s second largest economy stagnated.
Meanwhile, industrial production in Italy slumped by 0.9 per cent in December, wiping out the previous month’s 0.3 per cent increase.
The unimpressive results appear to confirm forecasts for a drop of 0.3 per cent in Eurozone industrial production and show how much the French economy is struggling to pick up speed.
The Eurozone report is due for release tomorrow.
The developments saw the EUR/USD pairing edge slightly lower.
Industrial production in Greece, on the other hand, surprised economists by advancing 0.5 per cent following November’s 6.1 per cent slump. Economists had expected a drop of 5.9 per cent.
In the opinion of economist Robert Wood; ‘The [Eurozone’s] economic recovery is slow but it won’t be derailed. What we’re seeing is a gradual exit from the Euro crisis as the pain of fiscal adjustment eases and confidence returns.’
Last week ECB President Mario Draghi also asserted that he expects the Eurozone to experience a slow but gradual recovery. However, if nations like France and Italy continue to act as a drag on the Eurozone’s economic recovery the ECB may have no choice but to introduce additional stimulus.
In a quiet news day for the US, ‘Greenback’ movement is limited. On Friday the North American currency stumbled against its major rivals as US non-farm payrolls figures disappointed for a second month.
The US Dollar was also feeling the pressure before new Federal Reserve Chairman Janet Yellen addresses lawmakers tomorrow.
As Yellen has made no secret of her pro-stimulus stance in the past her comments on the Fed’s commitment to the slow and steady tapering of easing will be of particular interest.
Tomorrow EUR/USD movement could also be triggered by US wholesale trade data, although investors will be looking ahead to the publication of the ECB’s monthly report on Thursday and advance US retail sales figures.
In other currency news, the Pound advanced on the US Dollar but declined against the Euro as investors await the release of the Bank of England’s inflation report.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,British Pound,0.8313 ,
Euro,,New Zealand Dollar,1.6509,