Euro drops as Commission downgrades Eurozone growth forecast

TOBIAS KLEINSCHMIDT

Euro drops as Commission downgrades Eurozone growth forecast


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The euro fell to a two-week low at the close of the week after the European Commission cut its forecasts for economic growth in the Eurozone.

The euro lost 1.3% of its value last week, as the ECB is expected to delay interest rates hikes due to a sharp drop in growth.

Germany’s DIHK Chambers of Industry and Commerce (DIHK) also slashed its 2019 growth forecast for the German economy from 1,7% to 0.9% on Thursday, pointing to slowing demand in China and, potentially, the UK. DIHK projections are based on a survey of 27,000 managers and are the biggest of its kind in Germany.

Italy’s bond yields shot upwards after the European Commission cut its 2019 growth forecast from 1,2% to 0,2%. The yield on 10-year Italian debt has climbed 12 basis points since February 7 – the highest since early January. The German Bund also hit a two-month high.

 

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