Euro Down in the Wake of Poor Economic Data
The euro was down on Wednesday morning, trading at 1.2938. The losses came after the purchasing manager's index for the eurozone's manufacturing and services sector showed a much lower than forecast output. Since the forecast has been cut several times in 2012, falling short of the October goal suggests the economy has a long road ahead to regain strength after this crisis.
On Wednesday, Bloomberg also reported that the German business climate was estimated to be at its lowest since February 2010. As the eurozone's largest economy, Germany has succeeded in pushing through the region's financial crisis relatively unaffected. However with the European Central Bank's new centralized banking structure, Germany has been very vocal about their concerns.
Mario Draghi is set to visit with the country's finance and government officials to talk about their concerns. Without Germany's approval, it will be quite difficult to move forward with the new structure.
Much uncertainty still remains over the Spanish bailout as well. Spanish Prime Minister Mariano Rajoy is set to discuss the 2013 budget and further austerity measures on Wednesday as well. The new budget, very unpopular among Spanish people, has raised riots and protests in the streets for weeks.
Rajoy has given no signs of moving closer to a bailout request, and many are expecting him to delay asking for one as long as possible. On Tuesday he made statements commending the ECB's bond buy plan and its new structure designed to help struggling economies, but gave no indication that he would be taking advantage of the bond buying plan anytime soon.
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