A record drop in Euro Zone industrial production has put further downward pressure on the euro. Earlier the euro had been pressured by automatic sell orders as the currency hit $1.41 and industrialproductmarketing the Euro Zone figures added to the Euro’s woes. Euro zone industrial production fell 21.6% from April 2008, a record drop. The Euro Zone figures are a sign that forex investmentIndustrial Production Rises in China and Japan
In Asia Chinese industrial production rose more than expected in May and Japan’s industrial production experienced its biggest monthly gain in 50 years. Despite struggling US and European economies many investors believe that the global economy is on its way to recovery from the worst recession since World War Two. Many forex investors remain cautious due to rising deficits and consumer credit costs. Bill Schultz of McQueen Ball & Associates stated, “While this is recovery, and it’s better, it may not be the jumping-on point to a stronger” rise in economic growth.
G 8 Meeting Closely Watched
Investors and Forex traders are watching the current G8 meeting with great interest. Statements and actions from the group of finance ministers will undoubtedly affect global currency exchange rates. At the G8 meeting many participants feel that global recovery is ‘not fully underway.’ European automaker Volkswagen said it saw no signs of recovery outside of China which posted gains in industrial production. A European Commission report stated, “Despite some evidence of a slowdown in the pace of decline, the evolution of imports and exports of all major countries remains very negative. Moreover, the fact that unemployment continues to rise in most major economies, means the global recovery is still not fully underway.”
The euro to dollar rate fell 0.7% to $1.4000 while the pound to dollar rate was $1.6421. The dollar to yen exchange rate rose 0.6% to 98.14. Currency exchange rates are not on the formal agenda of the G8 conference which is a preparation for the July G8 summit.
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