The Euro hit a fresh 20 year low in today’s trading session against the US dollar after a disappointing round of data from Germany, comments from ECB president Christine Lagarde as well as just overall greenback strength which battered the European currency.
The headline German IFO Business Climate Index hit the market at 84.3 in September, down from 88.5 in August, and well below analysts’ expectations for a figure of 87.1.
The Current Assessment Index fell from 97.5 to 94.5 and the Expectations Index tumbled to 75.2 from 80.3 and was also below analysts’ expectations.
"A big minus on all fronts, almost all sectors of the economy are in the minus, the German economy is facing a recession. Price expectations rose again, more than every second company looks to increase prices," the economist added. "Energy-intensive industries are particularly pessimistic about the winter". Said representatives from IFO.
In a monetary speech today, European Central Bank president Christine Lagarde noted the central bank still has concerns over rising inflation and will continue to raise interest rates until the situation with prices is under control
"The best contribution monetary policy can make to the euro area economy is to ensure price stability over the medium term. Signs of recent above-target revisions to some indicators of inflation expectations warrant continued monitoring. The risks to the inflation outlook are primarily on the upside." Said Mrs Lagarde.
She also noted that the European economy’s honeymoon period of growth after Covid was coming to an end it we take a look at the recent economic indicators.
"The strong demand for services that came with the reopening of the economy is losing steam." She added.