PRODUCT PROFILE

Latest Dublin Prices

NAME
LATEST
CHANGE
Aer Lingus 1.41 -0.01 more
BoI 0.32 0.01 more
CRH 17.45 0.27 more
Glanbia 11.21 0.04 more
Greencore 0.64 -0.02 more
Ind. News 0.12 0.01 more
Ryanair 7.36 0.05 more

 

Euro recovers from nine-month low

Thursday, August 14 14:24:35

The euro recovered from near nine-month lows against the dollar today on relief that the euro zone as a whole did not shrink in the second quarter, despite a contraction in its biggest economy, Germany.

Though euro area growth stalled in April-June, missing modest expectations of 0.1 percent, the numbers provided some respite for the euro after the weaker than expected data from Germany and France. The latter has failed to produce any growth at all since the start of the year.

The final reading for euro area inflation of 0.4 percent in July on an annualised basis, though weak, was in line with expectations.

The euro hit a high of $1.3396 after the overall euro zone data, having fallen to $1.3348 after the German numbers, close to a nine-month low of $1.3333 touched last week.

"You did see a little bit of a down-move on the German and French data this morning but by the time you'd got to (the data for) the euro area as a whole ... the consensus had moved," said Marvin Barth, European head of currency strategy at Barclays.

German 10-year bond yields briefly traded below 1 percent for the first time ever, after the disappointing data from the supposed powerhouse of Europe.

Spanish and French bond yields also plumbed record lows as the bloc's grim growth outlook increased pressure on the European Central Bank to eventually print money to support an economy bracing for the impact of tit-for-tat sanctions between the West and Russia over Ukraine.

Thursday's data is the latest in a weak run. On Wednesday numbers showed a surprise fall in euro zone industrial production in June, while on Tuesday a survey showed investor sentiment in Germany at its lowest in over 18 months.

"The overall picture is one of weakness coming from Europe and that's going to keep the euro very much under pressure," said Ian Stannard, head of European currency strategy at Morgan Stanley in London.

"That highlights the divergence we're seeing in the G10, with disappointing data coming from most countries, with the exception being the United States, and that's going to keep the dollar supported across the board."

The dollar index stayed close to an 11-month high hit last week, up almost 0.1 percent on the day at 81.540. (Reuters)

For more visit: www.businessworld.ie