Weak German data raises fresh Eurozone concerns
25/Σεπ/2012 • Currency Updates•
We saw very little news out of the UK yesterday as most of the focus was on Europe. Britains top share index, fell yesterday led by miners as dull European data kept the focus on a gloomy economic outlook tempering the boost given to markets by recent central bank stimulus moves in Europe and the US. Other than that, very little to report with Mortgage approvals the only data coming out of the UK today.
The Euro tumbled against the dollar yesterday after a widely regarded measure of business confidence suggested that the single currency’s largest could be heading for a recession. Germany’s IFO institute revealed that its latest business climate index declined for the fifth straight month in September. The score is still above its long term average yet the decline suggests that Germany as Europes powerhouse economy could be failing to support and prop up the other struggling states.
Fears about the debt crisis also flared up after Spains finance minister Luis de Guindos says the country is in no rush to ask for financial aid. The Spanish Governement is expected to give a budget plan later this week and a report on its banking system. Greece is also in focus after weekend press said the nation’s budget shortfall is almost double initial estimates.
The dollar picked up ground again yesterday as Eurozone leaders appeared divided on going ahead with the new Greek debt deal and support for Spain as mentioned above.
Later today we await important US data, with US consumer confidence and the Richmond Fed Manufacturing Index.
Improvements are being forecasted on both fronts. US data has increasingly outperformed expectations over recent weeks. More of the same this time around may underpin risk appetite trends amid hopes a firmer recovery in the US will offset a recession in Europe and a slowdown in Asia.