Euro slips after production report

The euro is in the red versus the US dollar after the eurozone announced a drop in industrial output.

The latest report from the eurozone showed us that the level of industrial production dropped by 0.5% in September. Economists were expecting a lesser decline of 0.2%, and this announcement put pressure on EUR/USD. The pair is now trading at $1.3414, down 0.15%. The news follows last week’s interest rate cut by the European Central Bank (ECB), which worried traders by raising questions about how weak the eurozone might be, if interest rates need to be cut to stimulate growth.

Tomorrow we will find out the level of growth from the eurozone, when the quarterly gross domestic product (GDP) is announced at 10am. Analysts are expecting minimal growth of 0.2%. We will also have GDP updates from countries like France, Germany and Italy tomorrow. The ECB’s decision to cut interest rates to an all-time low could be indication that tomorrow’s growth figure will be not be strong. It might even leave the door open for another rate cut.

Spot FX EUR/USD chart

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