Euro Strong at $1.30 Despite Poor Industrial Output Data
The euro climbed on Wednesday morning, trading at 1.3036. The common currency soared against the dollar as many began to speculate that the Fed will make Treasury purchases in addition to a program that already buys $40 billion dollars worth of mortgage bonds each month.
The euro's gains came against a backdrop of bad news, as the region's industry output data served to highlight its ongoing crisis. Eurostat, the EU statitstics office showed a decline in industrial production in the eurozone in October. According to Reuters, the 17 country bloc's production fell 1.5 percent in October, an even further fall than September's 2.3 percent decline.
Many have predicted a contraction for the region's economy for the October-December period, and Wednesday's data seems to support this forecast. After some of the region's largest economies faced tough austerity measures, unemployment has soared to record levels and caused households to cut their spending.
Germany, France and Italy, which make up two thirds of the region's industrial production, all showed a contraction in their factory output in October. Many investors were concerned to see that Germany, the largest economy in the region and thus far relatively untouched by the crisis, posted the largest drop.
As the region moves into mid December, many are forecasting further drops in production as most big businesses in the area have announced workforce reductions.
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