Euro Continues Lower On Encouraging U.S. GDP
The euro fell further below the dollar on Friday morning as poor economic data from the region weighed on investors’ confidence.
The common currency also lost some ground after U.S. GDP data came in better than expected on Thursday, pushing the euro to trade at $1.2568 at 8:00 GMT.
Data out on Thursday showed that the U.S. economy surpassed expectations of just 3.0 percent growth in the third quarter and grew 3.5 percent. The figure helped boost the dollar and added to growing confidence in the nation’s recovery.
Still, some were skeptical about the reading, saying that the figure on its own may not tell the whole story. Some analysts attributed the figure to defense spending and inventories, saying that fourth quarter GDP will likely take the hit.
Meanwhile, the eurozone continued to struggle with its own lagging recovery as data out on Thursday confirmed that Germany is struggling to stay afloat. The bloc’s largest economy and steam engine throughout the crisis has been posting lackluster economic indicators recently, and Thursday was no exception.
Bloomberg reported that German inflation unexpectedly fell to 0.7 percent in October, below expectations of 0.8 percent.
Political uncertainty in Greece is also a factor, especially after the nation’s Minister of Administrative Reform Kyriakos Misotakis told reporters that the region would be facing a “climate of uncertainty” over the next few months.
The region’s government has until February to elect a new president or the anti-bailout Syriza party will force the nation into a snap election. Prime Minister Antonis Samaras is backed by 150 of the coalition government’s votes, but 180 will be needed to elect a new president.
If a majority cannot be reached, a new election would be held in which current polls show that Syriza would dominate.
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