Yesterday the US published stronger-than-forecast retail sales figures and the ‘Greenback’ broadly strengthened as a result.
The US Dollar advanced on peers like the Euro and Pound as the report added to the case for the Federal Reserve persisting with its tapering programme, with the USD/EUR exchange rate edging away from a two-week low.
The Euro extended declines against its US counterpart early into the European session as growth data for the currency bloc’s largest economy showed less impressive expansion than forecast.
Since the onset of the global economic crisis Germany has stood tall while neighbouring nations crumbled.
The country avoided plunging into recession and helped the Eurozone return to tentative growth last year, but bolstering countries like Greece, Spain and Italy has taken a toll.
While economists had forecast that the German economy expanded by 0.5 per cent in 2013, year-on-year, it actually grew by 0.4 per cent following annual growth of 0.7 per cent in 2012.
Germany might be enjoying stronger growth than many other European nations, but this result does highlight the negative impact the Eurozone’s fragile economy is having on the superpower.
The data inspired this response from one Dusseldorf-based economist; ‘Europe is still cleaning up after the crisis and Germany is the main reason why the Euro-area economy is back to growth. Private consumption was the key for Germany’s expansion last year and it will be vital in 2014 as well.’
Eurozone trade balance figures could trigger more Euro movement in the hours ahead, and the publication of the US Federal Reserve Beige Book will also be of interest.
Of course tomorrow’s final inflation figures for the Eurozone and Germany will also be of considerable interest.
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,0.8308 ,
Euro,,New Zealand Dollar,1.6343 ,
Euro,,Canadian Dollar,1.4950 ,