© Reuters. Market: the euro is consolidating, indicators disappointing
Tuesday afternoon on the foreign exchange market, the european single currency kept the bulk of the significant gains (+ 1,01%) gained yesterday against the greenback, consolidating 0.23% 1,1449 dollar. The trends are also little marked against other major counterparts.
Yesterday, in fact, the dollar has been penalised by the monetary policy expectations. A specialist paris evokes the expectations of status quo on the policy rates of the Fed for the whole of this year. Investors are still responding to about accommodative of Mr. Powell, but also to the speech yesterday by the president of the Atlanta Fed’, which provides that a rate hike this year. Which is much less than anticipated at the end of 2018.
‘The German rates have increased in parallel with yields on us Treasury bonds on Friday, while the president of the federal Reserve, and Jerome Powell, was trying to calm down the financial markets, concerned by the economic slowdown in the United States. The yields of government bonds German 10-year-old reached the summit on Friday of 0.21% during the speech, marking the largest increase in yields on a day in the Bund to 10 years of age since June 2018’, underlines Saxo Bank. A positive factor for the euro.
The appetite for currencies deemed risky has also been boosted by hopes of a positive outcome of the trade negotiations between the United States and China.
However, the latest indications the economic from the Old Continent are, this morning, not the most encouraging. In Germany, the industrial production contracted by 1.9 per cent between October and November, while the consensus expected an increase of 0.3%. In addition, the previous figure was lowered to 0.8 per cent.
‘The decline of German industrial output in November brings a new proof that the largest economy in the euro zone grew at a weak pace in the 4th fourth quarter’, says Capital Economics.
Also published this morning, the index of economic sentiment of the euro area measured by the european Commission for December was down 2.2 percentage points to 107.3 points while it was expected by the consensus 108.2 points, and that it was of 109.5 points previously. ‘The deterioration of the confidence in the euro area stems from declines in the industry, services, construction and among consumers’, says the Commission, and it affects the first five economies of the euro Zone, from Germany to the netherlands.
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