The Japanese yen rose today as the escalating
The European Commission estimated that the economic growth in the European Union will almost stall next year. Gross domestic product of the EU and the Eurozone will grow only 0.5 percent through 2012, according to the EC forecast. The main reason for such downbeat outlook, as one may expect, is the credit crisis in the region.
The EC said in the forecast:
Continued uncertainty in financial markets relating to the sustainability of public finances in some euro area economies as well as fears of contagion affecting the core euro area countries will contribute to subdued growth. The global economy’s weakness, including of some of the most important partners for the EU, will reinforce this trend.
One can notice another negative factor for the EU economy in the report: the stalling growth of the global economy. The trick here is that both problems, Europe’s crisis and the global economic slowdown, “feed” each other, in a way. The European debt problems have a huge negative impact on the global economy, and the resulting slowdown in turn hurts the economy of the EU.
USD/JPY fell from 77.63 to 77.54 as of 5:32 GMT today. EUR/JPY trade near its yesterday’s close of 105.69. GBP/JPY went down from 123.69 to 123.49.
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