July 22, 2024

Euro down on economic slowdown fears

LQDFX Forex news Blog Euro down on economic slowdown fears

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The euro dropped on Monday after German data for September was weaker than expected, raising more fears about the economic slowdown.

German flash purchasing managers’ index survey data showed that German private sector activity shrank for the first time in 6-1/2 years in September. Manufacturing recession deepened unexpectedly and growth in the service sector lost momentum. Business growth across the EU region has also stalled this month.

Increasing talk of fiscal stimulus in the euro zone raised bond yields in the region last week. But many analysts say it is not enough to boost the single currency in the context of concerns about global trade and slowdown fears.

Τhe weakening euro suggests that investors do not think Germany – the euro zone’s biggest economy – is moving towards a significant fiscal package. The ECB has urged governments to focus on fiscal policy because the room for more monetary easing is limited.

The single currency, trading around $1.10 before the numbers were released, dropped 0.5% to as low as $1.0966, its weakest since Sept. 12.

The euro also slid versus the Swiss franc, losing 0.5% to as low as 1.0857 francs.


Forex – Euro down on economic slowdown fears

Foreign exchange markets reflected fading optimism over a U.S.-China trade deal.

The dollar was boosted by the euro’s decline, and its index was last up 0.2% at 98.748. The greenback has held up well in recent months as investors are attracted to the strength of the U.S. economy.

The safe-haven Japanese yen reversed its earlier losses and was last up 0.1% at 107.41. Any optimism was overshadowed by worries about the economic slowdown.

Sterling held steady on Monday as investors looked for signs of progress in Britain’s Brexit talks. Traders will be looking for any movement in Britain’s negotiations on Brexit when Johnson meets European leaders. Johnson is expected to meet European Council President Donald Tusk as well as German and French leaders Merkel and Macron.

Sterling slipped 0.2% to $1.2442. Against the euro, the pound was up 0.1% at 88.235 pence.

Oil fell below $64 a barrel on Monday, reversing an earlier gain. Prices were pressured by the prospect of a faster-than-expected full restoration of Saudi oil output and by fresh signs of European economic weakness. Brent crude fell 44 cents to $63.84 a barrel as of 1212 GMT, having risen as high as $65.50. U.S. WTI was down 38 cents at $57.71.

PLEASE NOTE The information above is not investment advice.Sources: Reuters, Investing, CNN money