Euro-Zone Fundamentals Deteriorate, Highlighting Further Weakness Ahead

Daily Forex Fundamentals | Written by DailyFX | Nov 24 08 12:16 GMT |

Fundamental Headlines U.S. Agrees to Rescue Struggling Citigroup - Wall Street Journal U.S. Auto Makers Look to Federal Sales Incentives - Wall Street Journal Investors rush to quit buy-out funds - Financial Times Barclays Wins Investor Support to Sell Shares, Chairman Says - Bloomberg UBS Overvalued Property by $100 Million, Fired Executive Says - Bloomberg EURUSD - The German IFO business confidence survey fell to a 16 year low of 85.8 from 90.2 as demands from home and abroad weakened further. In addition, business expectations slipped to 77.6 from 81.4, which crossed the wires much weaker than the 81.0 estimate projected by economists. Meanwhile, the Euro-Zone current account deficit widened to 10.6B from a revised reading of 5.3B in September due to a surge in capital outflows. The breakdown of the report showed that capital outflows reached EUR 106.8B this year, compared to an inflow of EUR 166.5 in 2007. Furthermore, industrial new orders for the Euro-Zone fell 3.9% in October following a 1.5% decline in the previous month, and may fall further over the coming months as fears of a global recession intensify. The breakdown of the report showed that orders for basic metals plunged 5.1%, followed by a 3.8% decline in transportation equipment. The data suggests that economic activity may remain subdued well into 2009 as demands deteriorate, and may lead the ECB to ease policy further in order to stave off a deep and prolonged downturn in Europe.