As German data fails to meet expectations the Euro pairs gains against the US Dollar.
The Euro Exchange Rate was in the region of 1.3120 against the US Dollar as of 11:40 am GMT
After days of mixed data for the Eurozone the currency bloc ended the week a low on Friday as German industrial production figures defied predictions for a 0.4 per cent gain by stagnating.
Data compiled by the Economy Ministry showed that in January industrial production in the Eurozone’s largest economy was unchanged from the previous month and 1.3 per cent lower than in the same period of the previous year.
This data, when viewed in conjunction with the 1.9 per cent slump in factory orders, reflects the weight of the economic crisis in the Eurozone on German trade.
However, separate reports have recently shown a surge in German investor and entrepreneurial confidence, a positive sign for the future. Meanwhile, many industry experts are viewing the situation objectively rather than negatively.
Hanover-based economist Jens Kramer comments: ‘Germany’s start into the New Year wasn’t great but one shouldn’t be too pessimistic about it. Industrial production will gather pace and we continue to be optimistic about the performance of the German economy in the first quarter.’
Similarly, economist Andreas Scheuerle stated: ‘Exports to countries outside Europe play a central role in Germany’s recovery. We can’t expect anything amazing, but with business confidence improving things will turn out for the better. Much will be decided in the first quarter.’
And in a statement accompanying the data the Economy Ministry said: ‘Industrial production stabilised at the turn of the year. Industrial production is already weighed down by the current decrease in orders, but the sentiment indicators that have been improving for months suggest an upcoming recovery.’
After dropping to a three-month low against the US Dollar, the Euro recouped losses yesterday on the back of ECB president Mario Draghi issuing an optimistic outlook for Eurozone recovery.
The common currency went on to jump to a fresh weekly high against the ‘Greenback’ prior to the release of this morning’s report.
In light of the slightly disappointing German data the Euro could decline in the hours ahead and is likely to experience additional movement once US employment data is released.
Economists are forecasting that the US economy added jobs last month but that the unemployment rate held at 7.9 per cent.
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