FOREX-Euro drops to new low as GDP data confirm weak growth
* Euro weakest since April 2017 on growth concerns
* Dollar finds more buyers amid coronavirus worries
* Yen, Swiss franc supported as investors stay nervous
* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh (Adds new analyst quotes, details after GDP data, latest prices)
LONDON, Feb 14 (Reuters) – The euro fell again to a nearly three-year low on Friday amid worries about slowing growth in the euro zone, as fourth-quarter data confirmed the economy’s sluggish performance.
The euro has lost close to 1% so far this week and is on track for its worst two-week performance since mid-2018.
Euro zone gross domestic product grew 0.1% quarter-on-quarter in the fourth quarter, in line with forecasts. Year-on-year growth was weaker than expected, at 0.9%, although employment grew more than expected.
The German economy stagnated, data also showed, renewing fears of a recession.
“When I think of the euro since the start of the year and in particular since the start of the month I think of `heavyweight’, as it has dropped like a stone compared with the dollar,” said Commerzbank analyst Antje Praefcke.
The euro fell to $1.0827 overnight before settling at $1.0841, down on the day. It was unchanged after the euro zone data was released.
The euro has been buffeted by signs of a slowdown in Germany and ongoing demand for dollars. Against the Swiss franc, the euro weakened to another four-and-a-half-year low of 1.060 francs before recovering.
Concerns about the extent of the coronavirus in China after a sharp increase in new infections and deaths has supported both the safe-haven yen and the dollar.
The dollar index, which measures the currency against a basket of six major currencies, rose to its strongest since October. It has risen 0.4% this week, after gains of 1.3% last week.
Traders are now waiting for a batch of U.S. data later in the day, including retail sales and industrial production.
The yen edged up to 109.81 per dollar, following a 0.25% gain the previous session.
China’s onshore yuan slipped to 6.9868 per dollar. The offshore yuan was last at 6.989, following a 0.2% decline on Thursday.
Sterling consolidated around $1.3030 mark. It gave back some of its gains after rising on Thursday when Rishi Sunak, an ultra-loyalist to Prime Minister Boris Johnson, was named finance minister.
His appointment raised expectations the upcoming budget would increase public spending to boost the economy following Britain’s Jan. 31 withdrawal from the European Union.
Kit Juckes, an FX analyst at Societe Generale, said the new finance minister’s appointment raised the bar for the actual budget, “since markets now price in easier policy than they did yesterday morning.”
The euro strengthened 0.1% against the pound to 83.195 pence , but that left the British currency still close to a two-month high. (Reporting by Tommy Reggiori Wilkes, editing by Larry King)
Source: Read Full Article