Euro Weakens Intraday after Data Shows Drop in German Industrial Production
THE TAKEAWAY: German industrial production weakened in May -> Euro well bid on the day but weakens after data
German industrial production fell more than expected in April, the German stats bureau said today. The data added to fears that growth in Europe’s largest economy is slowing as the far-reaching credit crisis curbs demand and consumer confidence. Production fell 2.2% on the month versus the expected 1% drop. The number was -0.7 weaker than April 2011.
Germany has remained the region’s strongest economy since the onset of the crisis, recently posting Q1 economic growth of 0.5% which helped the Euro-area avoid recession. Today’s numbers increased fears that that economic woes will catch up with Germany, which has thus far benefitted from low unemployment and increased exports to emerging markets.
The Euro remained well bid on the day, but suffered from the weak German numbers intraday. Fears of political instability have driven the single currency down since the beginning of May.
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