Market Overview

Euro Wallows Near 9-Month Low Ahead Of GDP Data

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The euro struggled ahead of the release of GDP data at $1.3353 at 6:00 GMT on Thursday morning.

The common currency was approaching its nine-month low of $1.3333 after industrial production data failed to meet expectations and added to speculation that the European Central Bank will have to ease further in coming months.

The Wall Street Journal reported that eurozone industrial production fell 0.3 percent in June, its second consecutive month of decline. Analysts had seen output rising by 0.3 percent, so the figure was an unpleasant surprise that reminded markets of the bloc's faltering economy.

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Now, investors are waiting for GDP data, due out later in the day. If the figure continues with the region's current pattern of lackluster data, it will likely drive the euro to new lows as investors worry about the bloc's future.

Although the worst of the bloc's financial crisis passed last year, the eurozone has not seen the economic growth it had predicted so far this year. With unreasonably high unemployment and falling inflation, eurozone nations will have a difficult time continuing to reduce their debt and getting their economies back on track.

Meanwhile, the dollar shrugged off flat retail sales data and continued to gain against most other currencies. Although retail sales were not as robust as economists had been expecting, investors are still optimistic about the nation's economy and believe that the Federal Reserve could potentially raise interest rates sooner rather than later.

At the moment, most are betting that the bank will introduce a rate hike some time in 2015 after it finishes tapering its monthly asset purchases.

Posted-In: European Central BankNews Eurozone Forex Global Federal Reserve Pre-Market Outlook Markets Best of Benzinga

 

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