The Euro has rebounded from yesterday’s losses due to a rise in the German IFO business climate indicator and ahead of the European commission’s latest economic forecasts for the Eurozone.
The single currency strengthened against the majority of its peers after the Munich based IFO institute said that its business climate index, which is based on a survey of 7,000 business executives across Germany climbed to 107.4 in February from the 104.3 level posted in January. The rise is the strongest monthly rise since July 2010, marking a fourth consecutive month of improvement.
“The markets took a heavy dive earlier this week, but they’re showing signs of a partial recovery,” said Berkeley Futures associate director Richard Griffiths.”The fact that traders are still buying on the dips shows that they’re hoping that the global economic recovery will continue, although it will take time.”
Germany’s economy shrank 0.6 percent in the fourth quarter of 2012 and another drop in the first three months of this year would meet the common definition of a recession as two quarters of shrinking economic output. But many economists expect a rebound now that fears over the euro countries’ debt crisis have eased.
All eyes will now turn to the weekend’s Italian election. Depending on the outcome we can expect to see the Euro move in either direction. One thing is clear, if Silvio Berlusconi wins then the currency will weaken due to investor fears for the Italian economy and the increased possibility that Italy could request a bailout.
The European Central Bank will also publish details at around 1100 GMT on how much banks plan to repay of its second batch of crisis loans when they get the first chance to return the money next week.
Current Euro exchange rates
As of 10:00 am
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8657
The Euro to US Dollar exchange rate is currently trading in the region of 1.3220
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2828
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5798
The Euro to Canadian Dollar exchange rate is currently trading in the region of 1.3472
The Euro to Japanese Yen exchange rate is currently trading in the region of 123.3419
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