Economic news –14 February 2013The euro declined sharply to a session-low against the US dollar on Thursday’s early trading as several Eurozone countries released discouraging economic data. The Single currency began falling from its intraday high of $1.3506 yesterday as Portugal’s unemployment rate reached its highest level ever, increasing to 16.9% in Q4, compared to 15.8% in Q3. The number of jobless people as a percentage of the labour force is a leading indicator for any economy. In the case of Portugal, the government is cutting spending and raising taxes in order to meet the terms of a €78 billion aid plan from the EU, the ECB and the IMF, which is widely blamed for the high unemployment rate in the country. The euro received another ‘strike’ following weak GDP data coming from France, Germany and Italy. The German GDP, which practically ‘’weighs’’ most in the Eurozone economy and is considered the growth engine of the currency union, caused the biggest concerns among investors. The euro quickly reflected these concerns and plummeted even further, touching at 1.3386.
The report showed that the German economy has contracted more than any time since 2009, with an actual figure of -0.6% for the last quarter of 2012.
However, market makers are not too concerned with the data, since according to them all important early economic factors are indicating an uptrend.
France and Italy also reported worse-than-forecasted GDP data. The French figure of -0.3% was slightly lower than the projected -0.2%. Italian data, on the other hand, showed a further and bigger contraction in the country’s GDP from the previous month (-0.2%), with an actual figure of -0.9%.
The release of EU GDP data later today caused more volatility in the euro chart movements and the single currency was trading at 1.3323 at the time of writing.. Forecasts showed a 0.4% shrink in the region’s economy on a quarterly basis, deepening the decline of 0.1% in the previous three months. However, the actual figure turned out to be worse as a reading of -0.6% signaled that the Eurozone will remain in recession.
Disclaimer: The Content of these charts and analyses does not constitute any form of advice or recommendation by Delta Financial Markets to buy, sell (or refraining from making) any trade or investment. You may wish to seek independent advice before entering into transactions.
Delta Financial Markets shall not be held liable by you or any others for any decision made or action taken by you or others based upon reliance on or use of information or materials obtained or accessed through use of these technical analyses and charts. DF Markets assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person’s reliance upon the information on this page. DF Markets shall not be liable for any special, indirect, incidental, or consequential damages.