Poor German data hits euro in Asia


TOKYO – The euro slipped in Asia on Wednesday after more gloomy data out of Germany exacerbated worries about Europe’s largest economy and the engine of eurozone growth.

In Tokyo midday trading, the single currency fell to $1.2636 and 135.40 yen from $1.2659 and 135.62 yen in New York, while the dollar edged up to 107.22 yen from 107.13 yen.

Germany’s widely watched ZEW investor confidence index fell in October for a 10th consecutive month, hitting its lowest level since November 2012.

Berlin later in the day cut its economic growth forecasts to 1.2 percent in 2014 and 1.3 percent in 2015, from previous forecasts of 1.8 percent and 2.0 percent, respectively.

The worsening outlook for German growth adds to concerns about the 18-member eurozone, which some analysts say is flirting with recession and is already holding back a global recovery.

“The German economy is losing traction very quickly and there is a real prospect that it could contract again in (the third quarter) after the 0.2 percent fall in the second quarter,” National Australia Bank said in a note.

Adding to the gloom, industrial output in the eurozone fell 1.8 percent in August, according to data published Tuesday, reversing the previous month’s gain that had stoked hopes of a fragile recovery.

Attention will now turn to speeches later in the day by European Central Bank chief Mario Draghi, after the recent announcement of further monetary easing measures to prop up the economy.

“ECB chief Draghi will also be on the wire but judging by recent rhetoric there will unlikely be anything dramatic despite further weakening in eurozone data releases,” Credit Agricole said.

Also on investors’ radar screens are US retail sales and the Federal Reserve’s Beige Book regional economic report, both due later Wednesday.

SOURCE: AFP

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