The dollar has extended its recent weakness against the Euro on Friday. Comments made yesterday by European Central Bank President Mario Draghi have continued to propel the gains in the Euro. Draghi said Thursday that the euro area may see a gradual recovery later in the year as there are some modest signs of stabilization.
While speaking at the post-decision press conference in Frankfurt, Draghi said, “More recently several conjunctural indicators have broadly stabilized, albeit at low levels, and financial market confidence has improved significantly.” “Later in 2013 a gradual recovery should start,” he added.
The German economy started positively in the new year and swiftly overcome the temporary weakness, the Economics Ministry said Friday. The economy appears to have contracted in the fourth quarter, it said. The indicators show a significant decline in economic output in the fourth quarter.
Exports were weaker due to low global growth. However, the ministry sees a gradual recovery in exports later this year with improvement in global economic situation.
Debt restructuring is not an option for Cyprus, Economic and Monetary Affairs Commissioner Olli Rehn said in an interview to German daily Handelsblatt, published Friday. There are a number of other options on the table to make the country’s debt sustainable, he told the daily. Rehn also urged the government to tackle the issue of money laundering.
The European countries, in particular Germany, have expressed reluctance to lend money to Cyprus unless it counters the menace with strict regulations. Cyprus asked for bailout in June last year.
The dollar sank to a 9-month low of $1.3365 against the Euro on Friday, extending its losses from the previous session. The U.S. currency traded around the $1.3035 level early Thursday morning.
France’s current account shortfall remained unchanged from the previous month in November, data released by the Bank of France showed Friday. The current account deficit remained unchanged at EUR2.9 billion in November, the agency said.
The buck has bounced back from yesterday’s one-week low of $1.6178 against the pound sterling on Friday, to around $1.6140.
U.K. manufacturing output declined unexpectedly in November in yet another blow to hopes of a recovery in the final quarter of 2012.
Manufacturing output decreased 0.3 percent in November from a month ago, when it dropped 1.3 percent, the Office for National Statistics showed Friday. Output was forecast to grow 0.5 percent.
Meanwhile, industrial output rose 0.3 percent month-on-month, underpinned by robust mining output. The November increase reversed last month’s 0.9 percent fall, but the rate of growth was smaller than the 0.8 percent rise forecast by economists.
House prices in the U.K. stayed unchanged from the previous month in December, data from a survey by mortgage services provider Acadametrics and LSL Property Services Plc showed Friday. The average price of a home in England and Wales remained broadly unchanged month-on-month at GBP227,026 in December, after recording a 0.2 percent increase in the previous month.
Japan on Friday approved a fresh round of stimulus spending worth JPY 10.3 trillion ($116 billion) to jump-start the flagging economy, as Prime Minister Shinzo Abe signals determination to fulfill his campaign pledges.
Speaking at a press conference, Abe said the measures will include spending on public works, disaster prevention and financial aid for small firms. He said that the new measures would add 2 percentage points to the gross domestic product and create about 600,000 jobs.
The greenback is trading nearly unchanged in comparison to the Japanese Yen on Friday, hovering around the Y89.100 level.
Japan posted a current account deficit of 222.4 billion yen in November, the Ministry of Finance said on Friday, marking the first shortfall in 10 months and adding to the case for additional stimulus. The headline figure was well shy of forecasts for a shortfall of 17.1 billion yen following the 376.9 billion yen surplus in October.
The U.S. trade deficit unexpectedly widened in the month of November, according to a report released by the Commerce Department on Friday, with a jump in imports more than offsetting an increase in exports. The report showed that the trade deficit widened to $48.7 billion in November from a revised $42.1 billion in October. The trade deficit for November reflected the widest U.S. trade deficit since a $49.6 billion deficit in April.
The wider deficit surprised economists, who had expected the deficit to narrow to $41.1 billion from the $42.2 billion deficit originally reported for the previous month.
U.S. import prices fell for the second consecutive month in December, the Labor Department revealed in a report on Friday, with the modest decrease coming as a surprise to economists. The report showed that import prices edged down by 0.1 percent in December following a revised 0.8 percent drop in November. Economists had expected prices to inch up by 0.1 percent compared to the 0.9 percent drop originally reported for the previous month.
The report also showed that export prices dipped by 0.1 percent in December after falling by 0.7 percent in the previous month. The drop came in line with economist estimates.