German growth surprise lifts Europe
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