The value of the euro has fallen to a new nine-year against the dollar, according to new figures.
On Thursday (January 8th), euro fell below $1.176 (£0.77) against the US currency before rallying later in the day. One of the key reasons behind the drop in the euro's value was the surprise news from Germany where the nation's traditionally strong manufacturing sector decreased. During November German factory orders dropped by 2.4 per cent, compared to October.
Germany has been enduring some difficult economic conditions of late. The country narrowly avoided falling into recession during November, recording a 0.1 per cent growth in the third quarter of 2014. Figures from Eurostat highlighted that Germany's economy had contracted by 0.1 per cent in the previous and another negative result would have seen the country enter a recession.
The country has started the new year in a similar vein with inflation falling to its lowest level in over five years. Germany's federal statistics office Destatis stated that the annual rate of inflation had fallen by 0.2 per cent in December 2014, from the 0.6 per cent recorded in November. This unstable performance from Europe's largest economy has had a negative impact on the euro.
Alongside Germany's struggles, analysts also noted that increased about extra stimulus measures to combat eurozone deflation had played a part in the decline of the currency. They are concerned that the eurozone could look less attractive for investors especially if the European Central Bank introduces quantitative easing to support the region's economy.
Michael Hewson, CMC Markets analyst, warned that "the biggest concern is that the markets are getting slightly ahead of themselves".
This latest fall in the value of the euro represented the fifth consecutive day the currency had dropped in value.
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