Euro drops to two-week low over fears of weak eurozone confidence
City Index September 26, 2012 1:30 PM
<p>The euro traded down a further 40 pips during last night’s Asian session, touching two-week lows of 1.2868 against the dollar following a string of […]</p>
The euro traded down a further 40 pips during last night’s Asian session, touching two-week lows of 1.2868 against the dollar following a string of weak economic data and increased eurozone uncertainty. This was also following news that Germany, the Netherlands and Finland issued a joint declaration that appeared to unravel much of what was agreed at the last European summit in June regarding the recapitalization of banks. Similarly sterling and Australian dollar continued to weaken from yesterday’s highs of 1.6265 and 10460, printing two-week lows of 1.6150 and 1.0346 in the early hours of this morning. The sell-off in the aussie dollar was prompted by a downgrade in South Australia’s rating by S&P from AA+ to AA, however outlook was maintained as stable.
Data released yesterday afternoon showed that confidence among US consumers is growing with a better than expected consumer confidence figure of 70.3, expected 63.1. However, the American optimism seems confined to the US as tomorrow at 9am the European Commission will publish consumer confidence data from the euro area, which is generally expected to drop to -25.9, the lowest since May 2009.
Today we have Italian Retail sales due at 9.00am as well as German CPI data around midday, however the main focus continues to be on Spain’s rising bond yields and the increased pressure from Spain’s bailout uncertainties.
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