Eurozone Industrial Output Rises
The dollar continued to struggle on Tuesday as the US government remained deadlocked over the nation's budget.
Although most are expecting the Republican-led house and the Democratic Senate to come to a last minute deal, investors were cautious as a failure to raise the debt ceiling would result in an unprecedented sovereign default over the coming weeks.
The euro held onto gains after more positive data helped confirm that the region's recovery was on the right track. Bloombergreported that industrial output data for August showed a better than expected increase.
Factory production gained one percent from July's figures, which added to optimism from positive factory output data and improving consumer confidence indicators.
Germany led the way with industrial output figures that showed a 1.8 percent rise in August. As the region's largest economy, the nation is under a lot of pressure from policymakers around the world who are expecting Germany to be the engine behind the bloc's recovery.
European Bank President Mario Draghi's predictions of a gradual recovery at the end of 2013 seem to be coming true, however Draghi himself has been cautious about the region's progress. At the October ECB policy meeting, Draghi reiterated his pledge to maintain an accommodative stance and keep interest rates low for an “extended period”.
Although a steady stream of improving economic indicators have been coming in since the bloc returned to growth, it still faces strong headwinds. For one, the eurozone is still struggling with a 12 percent unemployment rate; with rates double that in some of the region's struggling, southern nations.
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