This week sees the release of a number of important reports regarding the health of the Eurozone economy and it is not expected to paint a very pretty picture for the struggling trading bloc. The data is expected to reveal the economic trauma and scars that have ravaged the continent as a result of the ongoing Eurozone debt crisis and will confirm that the long suffering region is now suffering the longest recession since the single currency’s creation.
Gross domestic product data due on Wednesday the 15th is expected to show that region contracted by 0.1% in the first three months of 2013 marking a sixth-straight quarterly decline, beating the 15-month long recession in 2008-2009 at the height of the global financial crisis.
The Euro looks set to decline over the week as the data shows the weakness prevalent in the Eurozone economy. Unemployment is at record highs and the prospect of growth is virtually non-existent except in Germany. Sentiment looks set to turn against the Euro despite the European Central Bank’s pledge to backstop the Euro which eased financial-market tensions. Economic confidence is at a four-month low and record unemployment highlight the risk that the slump will persist.
Crippling austerity and dithering from the regions politicians has exacerbated the situation and worries are now growing that Slovenia will be added to the list of nation’s needing to be bailed out.
The Euro weakened further against the US Dollar and Sterling after European Central Bank policy-maker Ignazio Visco told a news website that the Eurozone’s Central Bank could cut its deposit rate into negative territory.
Such a move would mean that the ECB would charge commercial banks for holding their money overnight, something that the Banks President Mario Draghi said the bank was ‘technically ready’ to do. If the ECB does make such a move it would encourage banks to lend out more money to the real economy rather than keep it held at the ECB. At this point the ECB needs to try and do something, anything to try and halt the rot.
Key Eurozone data releases for the week 13th to – 17th May
Monday 13th May- Eurozone Finance Ministers meeting
Tuesday 14th May- German CPI data
German ZEW Survey
Wednesday 15th May- Eurozone GDP quarter on quarter
Eurozone GDP year on year
Thursday 16th May- Eurozone CPI data
Current Euro (EUR) Exchange Rates
The Euro/US Dollar Exchange Rate is currently in the region of: 1.2980
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8445
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3020
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.5669
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7713
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1846
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7698
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6401
(Correct as of 12:45pm GMT)