The euro continues to fall as German business confidence plummets due to fears of a lockdown.

0

The euro continues to fall as business confidence in Germany plummets due to fears of a lockdown.

THE EURO has continued to fall today, as new data shows that German business confidence has fallen for the fifth month in a row.

The pound is currently trading at €1.19 against the euro, its highest level since February 2020.

The Euro has lost ground against other major currencies in the last month, owing to a variety of factors ranging from the impact of Covid to central bank policy.

The Euro is performing particularly poorly against the dollar, with one Euro currently worth (dollar)1.12, down from (dollar)1.16 at the beginning of the month.

“Rising US yields and rate expectations, combined with a deteriorating picture for Covid cases in Europe, continue to punish the currency pair,” Victoria Scholar, head of investment at Interactive Investor, said.

Germany’s latest Ifo business climate fell for the fifth month in a row, and this week’s factory data logged the lowest growth in ten months.”

The Ifo index, which measures business confidence in the economy’s strength, has now dropped to its lowest point since February of this year.

The main challenges facing German companies, it found, are supply bottlenecks and the fourth wave of Covid in Europe.

Germany is debating whether or not to implement a full lockdown, with a decision expected today.

Despite protests, Austria’s neighbor has already implemented a complete national lockdown.

“The worst is yet to come with the energy crunch intensifying and the risk of lockdown,” said Christopher Dembik, Head of Macro Analysis at Saxo Bank, in response to the figures.

“On top of that, there are supply chain bottlenecks.”

“We can’t rule out the possibility of a significant slowdown in German GDP in the fourth quarter.”

“A new lockdown could even cause a GDP contraction,” says one economist.

Fears of a lockdown are also affecting stock markets, with airlines taking a hit today.

Fears of tighter restrictions caused share prices to fall for IAG, Easyjet, Ryanair, and Wizz Air.

“Their descent comes amid warnings from the World Health Organization that there could be an additional 700,000 new deaths in the region by March,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.

“This has sparked new turbulence for airline companies, which had hoped for a break in the clouds as bookings, particularly on lucrative transatlantic routes, were expected to recover.

“Brinkwire News in Condensed Form.”

Share.

Comments are closed.