The Euro has weakened further against the US Dollar after today’s plethora of data releases showed no signs of improvement across the troubled region.
Unemployment held steady at the record high level of 12% in February. Unemployment of under 25’s however rose to 23.9% with rates in Spain and Greece remaining over 50%. The high rate has raised expectations that the European Central Bank could cut interest rates in a bid to stimulate job creation and has led to politicians calling for a slowdown in austerity measures.
“Prolonging austerity today risks not achieving a reduction in deficits but the certainty of making governments unpopular so that populists will swallow them whole when the time comes,” French President Francois Hollande said last week.
Manufacturing data from the individual member nations painted a grim picture. First up was Ireland which had a terrible March as manufacturing contracted for the first time in over a year and recorded its sharpest drop in exports since the height of the great recession in 2009. The country’s PMI fell to 48.6, below the 50 mark that separates growth from contraction.
Spain suffered even worse with its manufacturing sector shrinking at the fastest rate since October. Markit economist Andrew Harker said: “The data for Spain make grim reading for the manufacturing sector. Moreover, the latest figures have brought an end to the recent period of moderating declines and cast doubt on any hopes of recovery for the rest of the year.”
Italy and even Germany also posted continued contractions in their manufacturing sectors increasing fears that contagion from the Eurozone debt crisis has finally seeped into the heart of the region. France, the second biggest Eurozone economy continues to contract at an alarming rate with activity remaining down for a 13th straight month.
As of 10:30 pm
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8453
The Euro to US Dollar exchange rate is currently trading in the region of 1.2878
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2329
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5355
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