Euro retreats as Spanish recession deepens

<p>The euro has retreated as Spain reveals its recession has deepened.</p>

After a flurry of comments from leaders proclaiming the worst of the eurozone crisis is over, Spain's recession has deepened, sending the euro down in forex markets.

The downturn in the economy worsened between October and the new year, with output sliding by 1.8 per cent from a year earlier.

Output shrank by 0.7 per cent quarter-on-quarter, marking the worst performance in the troubled Iberian nation since the global recession in 2009.

Spain's policymakers have been proactive, however, with prime minister Mariano Rajoy announcing new stimulus measures including tax cuts for young entrepreneurs.

But the country has a long way to go before it can stabilise its finances, as it suffers from 26 per cent unemployment, with youth joblessness accounting for more than half the population of 16-24-year-olds.

At 09:55 GMT, the euro slipped against both the dollar and pound, with €1 buying $1.356 and £0.856.

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