The euro is weakening against the US dollar today due to unfavorable data on the eurozone economy. Around 18:30 CET, the single European currency lost around 0.7 percent and fell below USD 1.06.
Recession in the euro area
“Signs of an economic recession in the eurozone are gaining momentum,” said analyst Christoph Weil of Commerzbank. Further interest rate hikes in the eurozone are thus becoming less and less likely, the DPA news agency wrote.
Preliminary results of a survey by S&P Global showed today that the decline in activity in the eurozone business sector accelerated surprisingly this month. The activity index fell to 46.5 points from 47.2 points in September, according to the report. Analysts had forecast a rise to 47.4 points in a Reuters poll. If the index is below the 50-point mark, it signals a decline in activity.
US economic growth
In the United States, by contrast, activity in the business sector continued to grow this month, according to S&P Global. Its index rose to a flat 51 points from September’s 50.2 points.
Last July, the ECB started raising interest rates to bring inflation under control. Last month, it raised its key interest rate for the tenth consecutive month, by a quarter percentage point to 4.50 percent. However, it is expected to leave interest rates unchanged on Thursday.
Source Czech Press Office