Euro Zone Industrial Production Climbed To Its Highest In Two Decades

An end of a calm economic week as major nations lack major economic data; today most important data of the day was industrial production, which on the year climbed the most in more than 20 years, due to higher production of energy.

Euro zone industrial production for January rose to 1.7% from the revised prior reading of 0.6% from -1.7%, while markets were projecting 0.7%. On the year, it also rallied to 1.4% from the revised previous reading of -4.1% from -5.0%, higher than the expected reading of -1.6%.

It is evident that industrial production heavily picked up in February, where we saw the manufacturing sector resume its expansion, but as long as there are high unemployment rates weighing on spending power, production output will remain pressured.

The euro zone expanded by 0.1% in the fourth quarter while last month the European Commission expects that the nation will expand by 0.2% in the first quarter of this year, while on the year might expand 0.7 percent.

The support that was witnessed in the main sectors that fuel economic growth in the euro zone was a result of the unorthodox measures applied, while the rest of the support came from the historic low interest rates of 1.00%.

As officials were so focused on prompting growth levels, they did not pay much attention to budget deficits, since there are wide budget deficits recently all around global economies, and especially in Greece, which is considered to be a major woe now since it is undermines growth prospects.

Fears are hovering around the euro, where if Greece is able to narrow the budget deficit from 12.7% of GDP to the EU's limit of 3%, and this causes the euro to depreciate heavily, since Greece is part of the euro zone and using the euro as its official currency.

EU policy makers are meeting this weekend with Greek officials and might discuss measures to help Greece narrow their budget deficit, French President Sarkozy announced this month.

Investors are looking forward to the meeting this weekend; we see the euro versus the dollar is rising while as of 10:32 GMT it hit a high of 1.3786 and a reached a low of 1.3668, trading at 1.3778.

Ecpulse

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