Euro Turbulence Against Major Currencies

The euro has fallen against the US dollar this morning GMT, buying EUR 1.098, falling from the highest point so far today of EUR 1.103.

A complete reverse of the euros fortunes against the UK pound, which has risen up to purchasing £0.78 this morning GMT, from just below £0.786 in the early hours of today.

The uncertainty for sterling in the aftershock of the European Union referendum announcement for June 23, continues to follow it.

Euro Hit by Poor Economic Data

The euro has largely taken a downturn against the US dollar, due to poor figures on productivity, and a lack of optimism from the current business climate in Germany.

Official figures revealed that the German economy grew only moderately at the end of last year.

GDP increased by 0.3% quarter on quarter, remaining stable from the growth recorded in the third quarter.

But was less than the 0.4% of economic expansion recorded for the first two quarters of last year.

Domestic demand was the largest contributor to fourth quarter growth. General government final consumption expenditure sufficiently rose by 1.0%, while household final consumption expenditure climbed slightly by 0.2%.

The gross fixed capital formation, the net increase in physical assets, was up in construction by 2.2% from the third quarter.

There was also an increase in the capital formation for machinery and equipment increased, escalated by 1.0%, a figure that is largely attributable to spending in this area from the federal government.

Foreign trade had a downward effect on growth, because exports of goods declined by 1.7%. Imports also decreased, but not as at a faster rate than exports, with a declined of 0.6%.

In total, the balance of trade had a negative effect on the total; GDP, reducing it by 0.5%.

IFO Sentiments Low

The Munich based IFO Institute’s Business Climate Index for German industry found that there was currently less enthusiasm for economic progress.

The index fell to 105.7 from 107.3 in January, the third consecutive monthly fall.

Overall, the majority of companies were pessimistic about their business outlook for the first time in over six months.

Confidence was particularly low in the manufacturing sector, with expectations reaching a nadir, since the hyperbole of the financial crash in 2008.

In contrast, there was an improvement with the current business situation, a pattern which emerged in several parts of manufacturing.

Construction was the only sector in which attitudes in the business climate index rose.

This was due to assessments of the current business situation, which hit a new record high. Business expectations, on the other hand, deteriorated for the fourth month in succession

France Household Confidence Dips

The National Institute of Statistics of Economic Studies (INSEE) in France, have revealed that confidence in household finances has fallen.

When asked about views of their financial futures, respondents to the survey thought that prospects were bleaker.

Compared to January, fewer households believed it was the time to make major purchases.

Households’ opinion of their saving capacity remained stable, and remained at the INSEE survey long term level in February.