The latest economic data out of the eurozone is pointing to a possible recession, and that has the euro losing ground to the US dollar today. Business activity in the eurozone showed an unexpected contraction for the month of February, and that is raising fears of economic slowdown.
According to Markit Economics, the eurozone’s composite purchasing managers’ index dropped to 49.7 in February, from the 50.4 it showed in January. Many had expected the index to rise to 50.8, and the contraction below 50 has taken many by surprise. The result is a slightly weaker euro against the US dollar.
The economic data is disappointing to many, who had hoped that the eurozone’s troubles would be easing now that a Greek debt deal has been reached. Even though there are still doubts about how the Greek debt deal will work in the long term, as well as concerns that other eurozone countries could be in the same type of trouble, there had been better expectations for the economy.
Now, though, analysts are wondering if it’s time to reconsider eurozone growth, and whether or not the 17-nation bloc could be headed for recession.
At 15:25 GMT EUR/USD is down to 1.3223 from the open at 1.3233. EUR/GBP is higher at 0.8441, up from the open at 0.8389. EUR/JPY is also higher at 106.2050, up from the open at 105.5250.
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