Ger­man growth sur­prise lifts Europe

The New Age (Gauteng) - - BUSINESS -

STRONG Ger­man eco­nomic growth data drove the euro to a three-week high yes­ter­day and gave Euro­pean stocks a lift af­ter five days of falls put them at a two-month low.

The up­lift to sen­ti­ment came af­ter dis­ap­point­ing Chi­nese in­dus­trial and re­tail fig­ures had sub­dued Asia, with in­vestors also pon­der­ing whether a marked flat­ten­ing in the US yield curve might be a har­bin­ger of a more global slow­down. There was no sign of that in Ger­many where an 0.8% third-quar­ter growth read­ing beat fore­casts and showed the econ­omy grow­ing at an­nu­alised rates of more than 3%.

The euro jumped to $1.17 ver­sus the dol­lar and reached a one-year top against Swe­den’s crown af­ter in­fla­tion fig­ures came in weaker than ex­pected.

“It is not the dol­lar that is weak, it is the euro that is strong,” Saxo Bank’s head of FX strat­egy, John Hardy said.

With signs of a move up again in Euro­pean bond yields, some traders were back to pric­ing in an end to the Euro­pean Cen­tral Bank’s stim­u­lus, he said. – Reuters

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