The Euro has weakened against the majority of its peers after the latest economic data out of the Eurozone showed that the region is struggling to get out of recession.
The region posted an overall GDP contraction of 0.6% in the fourth quarter as the Eurocrisis continues to bite. The economies of Greece, Spain, Italy, Ireland and Portugal are all struggling to return to growth. The figure is worse than had been expected causing the currency to drop and renewing concerns that the Euro crisis is far from over.
The struggling French economy posted a contraction of 0.3% in the final quarter supporting some analyst belief that the nation is heading for a deep recession. The French Central Bank however disagrees after recently stating that it believes the French economy will expand in the first quarter of 2013 but French Prime Minister Jean-Marc Ayrault acknowledged for the first time on Wednesday that weak growth was putting his government’s deficit goal for 2013 out of reach.
The disappointing GDP figures combined with yesterdays record high unemployment data from Portugal to weigh down the single currency. Spain recently released figures that showed that the regions fourth largest economy remains deep in recession after posting a 0.7% contraction.
The Eurozone’s two biggest economies, France and Germany, both posted larger than expected contractions in their economies for the final quarter of 2012.
Germany- the region’s largest economy- saw its Gross Domestic Product (GDP) fall by 0.6% thanks to a decline in the demand for exports. The surprise decline is the deepest contraction since the height of the financial crisis in 2009.
The German statistics office said: “Comparatively weak foreign trade was the decisive factor for the decline in the economic performance at the end of the year: in the final quarter of 2012 exports of goods declined significantly more than imports of goods.”
A concern for exporters within the Eurozone is the strength of the currency. The Euro hit a 14-month high against the US Dollar in February as well as soaring against a basket of other currencies including the British Pound. The European Central Bank predicts that the Eurozone will return to growth by the end of this year if the currency continues to remain high then any recovery could be snuffed out due to the high cost of exports.
Current EUR exchange rates
As of 10:10 am
The Euro to Pound Sterling exchange rate is currently trading in the region of 0.8607
The Euro to US Dollar exchange rate is currently trading in the region of 1.3341
The Euro to Australian Dollar exchange rate is currently trading in the region of 1.2883
The Euro to New Zealand Dollar exchange rate is currently trading in the region of 1.5697
The Euro to Canadian Dollar exchange rate is currently trading in the region of 1.3350
The Euro to Emirati Dirham exchange rate is currently trading in the region of 4.9005
The Euro to Swiss Franc is currently trading in the region of 1.2323
The Euro to Japanese Yen exchange rate is currently trading in the region of 124.8180
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