18th November 2014
Concern about the strength of the global economy has taken its toll on the euro in FX trading, with the single currency losing many of its recent gains.
Following comments from David Cameron over the weekend about headwinds faced by the industrialised nations, it emerged on Monday that Japan has fallen back into recession. The markets had anticipated 2.1 per cent GDP growth in the third quarter, but the country actually endured a 1.6 per cent fall.
As a result of the drop – which followed a 7.3 per cent contraction in the second quarter – it's likely that Shinzo Abe will call for snap elections in order to seek a mandate for even more dramatic financial stimulus.
That's something that the ECB is willing to expand in Europe if its current plans don't gain the expected traction, although it's expected that Germany may oppose it. The prospect of even looser policy didn't help the euro in FX trading yesterday, meaning that at 0800GMT today one euro was worth $1.249.
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