The euro was hit by a series of negative economic data coming out of Europe today, beginning with the Sentix investor confidence, retail sales and German industrial production, all missing forecasts and lower than previous numbers.
Euro zone retails sales fell sharply in September, weighed by declines in France, Spain and Portugal. Eurostat reported a drop to 0.7 percent from August’s 0.1 percent growth, and beat estimates for sales to remain flat.
The decline in sales is the latest evidence of the economic downturn in the euro zone, with consumers and businesses holding back on their spending, while governments cut their budgets in an effort to contain the sovereign-debt crisis. Consumer spending has been hit by rising inflation and fears over job security.
Euro zone investor sentiment dipped to its lowest level in more than two years in November, the Sentix research group said on Monday, adding to fears that the sovereign debt crisis could push the region into recession.
The index tracking euro zone investor sentiment dropped for the fourth consecutive month to -21.2 in November, its lowest level since August 2009, from -18.5 in the previous month.
Meanwhile industrial production in the euro zone’s largest economy, Germany, fell more than expected in September compared with the previous month, in the latest sign of a slowdown in the euro zone’s economic powerhouse.
Total production fell 2.7% in adjusted terms in September, Germany’s economics ministry said Monday, a much larger fall than the 0.9% drop expected by economists.
The euro fell 0.4 percent after the release of the first set of data, to touch a European session low of 1.3680 but soon rebounded on hopes that Italian Prime Minister Berlusconi would resign today.
