Euro slips after regional economic surveys disappoint

0
49


The euro fell after regional data showed a faltering economic recovery as the pound slipped after negotiators on both sides of the Channel warned of lack of progress in Brexit negotiations .

The single currency accelerated to a 0.8% decline against the dollar to $ 1.1766 after survey data showed a hesitant rebound in the single currency region, spurred by the two plus big block savings. The numbers raised questions about the strength of the bloc’s rally in the third quarter.

Friday’s drop in the euro against its US counterpart barely started a strong rally in the currency in recent weeks, after EU leaders agreed to a bloc-wide bailout and that the dollar was under a lot of selling pressure. The euro has risen about 10 percent against the dollar since March.

There was “a clear sense of concern over the near-term economic outlook,” MUFG’s Derek Halpenny said before the figures were released and after the European Central Bank said on Thursday that there was “no room for complacency ”.

Stocks in Europe had a choppy session as Friday’s numbers set the tone for the outlook for the continent’s economic recovery. The European Stoxx 600 reversed mid-morning gains to fall 0.6% early in the afternoon. London’s FTSE 100 followed these moves and recently fell 0.4%.

Futures markets have shown US stocks on track for a slight rise at the Wall Street open, with the S&P 500 expected to gain 0.2%. The index hit an all-time high this week, posting a 0.4% rise in the first four sessions of the week. If he keeps the momentum positive, he will be on track for his fourth consecutive weekly win.

The pound took a hit after Brexit negotiators gave a grim assessment of the latest EU-UK negotiating round, with the UK representative admitting that “little progress” had been made.

An agreement “will not be easy to achieve,” said UK chief negotiator David Frost, noting that “time is running out for both sides”. Michel Barnier, his European counterpart, said “time is running out” and added that the UK “must present clear and constructive proposals” for the next round of Brexit negotiations.

The pound accelerated an early decline to move away from the dollar 0.8%, recently trading at $ 1.3108, but against the euro it was stable. A euro in Friday’s midday session bought 89.75 pence.

“We have had useful discussions this week, but there has been little progress,” Frost said in a statement Friday, after the two sides concluded their seventh round of negotiations.

The pound had a particularly topsy-turvy week, posting its biggest one-day decline in two months on Wednesday, while a day earlier its 1% rise became its biggest daily gain since June 1. barely positive for the week, up 0.1% against the dollar.

Data in the UK revealed a robust response to coronavirus-related initiatives, with retail sales and business activity indicating a strong economic recovery, in stark contrast to the euro area.

“The slight increase in retail consumption may help allay concerns about the fragile UK economy – but not for long,” said Alistair McQueen, head of savings and retirement at insurer Aviva. “A rapid recovery still seems far away.”

Stocks in the Asia-Pacific region rebounded after a rally in tech stocks that had supported Wall Street even as signs of worsening unemployment and manufacturing activity in the United States appeared.

Hong Kong’s Hang Seng index rose 1.3% while the Chinese CSI 300 index of shares listed in Shanghai and Shenzhen rose 0.9%. Japan’s benchmark Topix index was 0.3 percent higher.

LEAVE A REPLY

Please enter your comment!
Please enter your name here