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Euro Strengthens on Positive Economic Reports

April 23, 2009 at 13:17 by Andriy Moraru

EuroThe dollar and the yen lost ground against the euro, as an index of services and industrial production in Europe showed better than estimate numbers, creating speculations of an economic recovery in the Eurozone.

An index combining services and industrial numbers in the Eurozone rose from 38.3 in March to 40.5 in the last report, which was significantly more than what economists were expecting. After breaking multiple record lows, the slump in Europe may be easing, as the French manufacturer’s confidence rose after one year of constant decreases, reaching the lowest level in more than 30 years. Credit Suisse, a leading European bank, also pushed the euro up showing the first earning reports after consecutive periods of losses.

The fact that the economic conditions are not deepening in Europe is already a solid factor to support the euro, an opinion shared by most of the financial analysts. These kind of positive reports bring investors back to purchase equities and invest in currencies that, facing a serious situation of crisis, would be avoided. Not only the euro but high-yielding currencies such as the Australian dollar will tend to rise if favorable reports continue to be released.

The EUR/USD rose from 1.2935 to 1.3044 crossing the 1.30 line for the first time since last week. The EUR/GBP had a sharp rise from 0.8832 to 0.8978.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

2 Responses to “Euro Strengthens on Positive Economic Reports”

  1. Alain Coret

    Following on above article I would like to know whether the Euro will strenghthen against the South african Rand (ZAR) within the near future i.e. next 2 weeks!
    The Euro has in the last 1-2 weeks weaken against the ZAR and wonder if it will continue.

    Thank you for your response.


  2. Andrei Moraru

    Alain, as I understand recent ZAR’s appreciation was a reaction to the national elections. As the buzz around the elections will fall off the South African rand will have to depreciate against the euro a little. So, for the 2-week forecast on EUR/ZAR I’d say long.

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