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Improved optimism but a worsening outlook for the Eurozone

Business morale might be on the up in the Eurozone, but unfortunately the improved confidence has yet to have a significant effect on some of the currency bloc’s most pressing economic issues.

According to the European Commission, economic sentiment in the Eurozone rose for a second consecutive month, achieving 87 after an increase of 1.3 points.

However, optimism alone is not enough to see the struggling 17 nation currency bloc through the ups and downs of the global economic slowdown.

A separate report compiled by Eurostat may have shown a rise in retail sales in November but after the steep declines recorded in the three previous months the 0.1 per cent increase was a meagre improvement. The figures also showed a drop in food and drink sales which was only offset by increased expenditure on fuel.

The EU statistics office also issued another disappointing report this morning, with statistics revealing that in November Eurozone unemployment hit its highest ever level.

18.82 million people in the Eurozone are now without work. Shockingly, that translates as 11.8 per cent of the working population.

Meanwhile, earlier today Germany (the largest economy in the Eurozone) was dealt a crushing blow as the nation’s exports were shown to have declined by more than predicted by economists.

Despite economists envisioning a decline of just 0.5 per cent exports, when seasonally adjusted, plummeted by 3.4 per cent in November, wiping out October’s surprise 0.2 increase.

The figures, compiled by the Federal Statistics Office, demonstrate how damaging the ongoing economic crisis within the Euro area has been for Germany.

One researcher with Standard Chartered Bank commented: ‘The big problem has been subdued demand in neighbouring economies, and November saw a particularly weak level of activity in other Euro-area countries.’

So, business morale may have been bolstered by the recent efforts of policy makers within the Eurozone at restoring a semblance of stability in the region, but as these data releases reveal the problems are far from over.

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As of 11:20 am

The Pound to Euro exchange rate is currently trading at 1.2255

The Pound to US Dollar exchange rate is currently trading at 1.6085

The Pound to Australian Dollar exchange rate is currently trading at 1.5317

The Euro to US Dollar exchange rate is currently trading at 1.3120

The Euro to Pound exchange rate is currently trading at 0.8155

These Exchange rates are provided by TorFX, a leading foreign exchange broker, providing unbeatable exchange rates for all your currency needs.