The euro dropped to a nearly three-year low amid slowing growth concerns, as fourth-quarter data confirmed the slack performance of eurozone’ s economy.
Euro zone gross domestic product grew 0.1% quarter-on-quarter in the fourth quarter, in line with forecasts. Year-on-year growth was weaker than expected, at 0.9%, although employment grew more than expected. The single zone’s economy is growing at the slowest rate since the bloc’s debt crisis seven years ago.
The job market, however, continued to improve as the number of people in work increased 0.3 per cent in the final three months of 2019.
The German economy stagnated, data also showed, renewing fears of a recession.
The euro fell to $1.0827 overnight before settling at $1.0841, down on the day. It was unchanged after the euro zone data was released.
The euro has been buffeted by signs of a slowdown in Germany and ongoing demand for dollars. Against the Swiss franc, the euro weakened to another four-and-a-half-year low of 1.060 francs before recovering.
The virus outbreak showed no sign of peaking, with health authorities reporting more than 5,000 new cases. Concerns about the extent of the coronavirus in China has supported both the safe-haven yen and the dollar. Yet investors digested whether China’s coronavirus outbreak would cause long-lasting damage to global economy.
START TRADINGForex – Euro dropped on weak growth worries
Currency traders had matters beyond the coronavirus on their minds. Traders are now waiting for a batch of U.S. data later in the day, including retail sales and industrial production.
The dollar index rose to its strongest since October. It has risen 0.4% this week, after gains of 1.3% last week.
The Yen edged up to 109.81 per dollar, following a 0.25% gain the previous session.
The common currency strengthened 0.1% against the pound to 83.195 pence, but that left the British currency still close to a two-month high. The euro dropped to another near-three-year low, with worries lingering about slowing growth in the euro zone.
The British pound consolidated around $1.3030 mark. It gave back some of its gains after rising on Thursday. Rishi Sunak, an ultra-loyalist to Prime Minister Boris Johnson, was named finance minister.
In commodities, oil edged higher and was on track for its first weekly gain in six weeks.
Brent crude futures were up 15 cents at $56.49 a barrel. Brent is 3.7% higher for the week, the first increase since the week of Jan. 3.
U.S. WTI crude futures were up 2.3% on the week, on course to post their first weekly gains in six weeks.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money