2th March to 6 March 2009 Euro / USD

Posted by admin | Posted in Weekly and Daily Wake up | Posted on 02-03-2009

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The euro zone is under great strain due to deepening recession. The euro is floating at the current rate of 1.2672 US Dollars which was 1.21% below from the last week.
The Euro started with a bad start of 1.2635 US dollars where it dropped over 100 bps before finding a support in consumer prices which fell to 1.1% from 1.6% on lower energy costs. Also the major cause was rising unemployment in the region which touched a mark of 8.2% which is the highest. The companies are still giving pink slips to employees on account for cutting costs which is impacting the euro currency.
The German economy is the worst hit which is the worst in past 22 years despite the government initiative of providing the stimulus package. The IFO institute monthly index declined to 82.6 points in February as compared to 83 in January. This has led to shrinking of German economy up to 2.1%. Also German services PMI were 41.6 as compared to a benchmark of 45 points.
Moreover French Manufacturing Purchasing Managers Index (PMI) dropped to 35.4 failing to reach a mark of 40 points.
This may force European Central Bank (ECB) to cut interest rates further to escape the Euro zone from deep recession and make the currency strong against the dollar.