Euro area Economic Confidence Drops over ForecastFiled under: Business;
Economic confidence within the euro area fell over economists forecast to rock bottom in almost three years in July, suggesting the economy’s slump extended into the third quarter as governments struggled to tame the debt crisis. An index of government and consumer sentiment in 17-nation euro area dropped to 87.9 from 89.9 in June, the eu Commission in Brussels said these days. That’s rock bottom since September 2009. Economists had forecast a drop to 88.9, the median of twenty six estimates during a Bloomberg News survey showed.
European governments are striving to contain the debt turmoil, that has undermined confidence and last month forced Spain and Cyprus to hunt external aid. European Central Bank President Mario Draghi, who can meet with U.S. Treasury Secretary Timothy Geithner in Frankfurt these days, said last week that policy manufacturers can do whatever is needed to preserve the euro. It seems that the euro zone is headed for more clear gross-domestic-product contraction within the third quarter, said Howard Archer, chief European economist at IHS world Insight, who estimates the second-quarter contraction at 0.3 percent. The weakness piles nevertheless a lot of pressure on the ECB to come up with concrete measures at its policy meeting on Aug. 2.
The euro has depreciated seven.4 percent against the dollar over the past three months as Spain in June asked for as much as a hundred billion euros ($123 billion) of bailout loans for its banks. the eu currency is down 0.5 percent against the dollar these days, trading at $1.2277 at 12:05 p.m. in Brussels.
‘Pull-Your-Hair-Out Market. Moody’s Investors Service on July twenty three cut the outlook on Germany’s Aaa credit rating to negative and said there is a risk that Greece could leave the euro and an increasing chance countries like Spain and Italy will require aid.
There are an awful ton of bumps within the road before we have a tendency to get home, John Taylor, chairman of FX concepts LLC, told Sara Eisen on Bloomberg Television’s money Moves on July 27 in ny. I’m alittle nervous that something may happen. It’s a pull-your-hair-out market. With governments seeking ways to plug their budget deficits, the economy is edging toward its second recession in four years, defined by two quarters of economic contraction. German business confidence fell over economists forecast in July to rock bottom in more than two years and euro-area services and producing output contracted this month.