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Euro Falls amid Slow Vaccine Rollout, Declining Industrial Production

February 15, 2021 at 16:34 by Vladimir Vyun

10 and 20 eurocent coins and 10 and 20 euro notesThe euro fell against the majority of most-traded currencies today, though managed to keep its previous gains versus the US dollar and extend the rally against the Japanese yen. Market analysts named two most likely reasons for the euro’s weakness: a slow vaccine rollout and a bigger-than-expected contraction of industrial production.

The European Union fell behind on vaccine rollout compared with the United Kingdom and the United States. European Commission President Ursula von der Leyen admitted as much, saying:

We were late to authorise. We were too optimistic when it came to massive production and perhaps too confident that what we ordered would actually be delivered on time.

The slow vaccination process endangers the economic recovery in the EU after the COVID-19 pandemic.

Eurostat reported that industrial production dropped by 1.6% in December on a seasonally adjusted basis. The actual decline was four times bigger than the forecast decrease of 0.4%. On a positive note, the trade balance surplus widened from €24.9 billion in November to €27.5 billion in December, seasonally adjusted. That is instead of narrowing to €22.3 billion as analysts had predicted.

EUR/USD was little changed at 1.2128 as of 14:33 GMT today. EUR/JPY climbed from 127.17 to 127.77. At the same time, EUR/GBP dropped from 0.8747 to 0.8720. EUR/AUD fell from 1.5606 to 1.5583.

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