By amer Hasn Market
Euro is still moving almost sideways since the end of last week, trading on either side of the 1.095 level. Today, it was able to record some slight gains of about 0.07%.
The euro’s gains today came despite weak industrial production data from Germany which created some pressure for a short period of time initially.
Today witnessed industrial production figures in Germany for last November, which confirmed the continued weakness in manufacturing activities. On a monthly basis, industry output contracted by 0.7%, which represented the seventh consecutive month of contraction and was contrary to expectations for a growth of 0.2%. On an annual basis, outputs contracted by 4.87%, which represents the sixth consecutive month of contraction as well.
The largest decline in industrial production came from a 2.9% decline in construction output on a monthly basis, in addition to a 0.7% and 0.5% contraction in production of capital goods and intermediate goods, respectively. As for energy-intensive industries, output recorded a growth of 3.1% in their outputs on a monthly basis, but they were 4% below the levels of the same period of the previous year. Excluding energy and construction items, industrial production contracted by 0.5% on a monthly basis.
This continuing trend of declining industrial production may be worrying if it continues, which comes in conjunction with the political and social turmoil in the largest economy of the Eurozone. This continued decline may also contribute to weakening the labor market, which is still resilient and constitutes a solid support ground for the economy.