On Wednesday, the euro continued its significant losses from the previous day and fell below 1.06 US dollars.
At midday the common currency was trading at $1.0566. In the morning the euro was still trading at over $1.06. The European Central Bank (ECB) last set the reference rate at $1.0632 on Tuesday afternoon.
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Traders pointed to the high level of uncertainty on the financial markets. The conflict in the Middle East in particular is supporting the dollar. The price of the euro had already fallen sharply on Tuesday. Economic data from Germany that was better than expected did not support the euro in this environment.
The mood in the German economy improved in October for the first time in six months. The Ifo business climate also rose more than economists expected. Above all, the assessment of the current situation improved.
“German companies are hoping for better times next year with low inflation and the prospect of falling interest rates,” commented Ulrich Kater, chief economist at Dekabank. “However, the German economy is not doing well again because of this.” The demand for machines and equipment worldwide continues to be too low and the order backlog is dwindling. “This also shows a strong dependence on China, because Chinese companies are pushing ever further into the export domains of German industry,” warned Kater.
FRANKFURT (dpa-AFX)
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