Good economic data from the eurozone and a step forward in addressing the Greek debt crisis spurred a recovery of the euro on the global currency market last week, with its exchange rate against the dollar reaching the highest level in a month.
Last week, the dollar index, which shows the value of the U.S. dollar against six major world currencies, fell by 1.02 percent to 79.69 points, the lowest level in three weeks. Meanwhile, the dollar weakened by 1.07 percent against the European currency, causing the euro’s exchange rate to jump to 1.3766 dollars, the highest level in a month.
The euro also strengthened against the yen last week, by 1.33 percent, reaching a price of 124.70 yen. Against the Japanese currency, the dollar also strengthened, rising by 0.23 percent to 90.56 yen. The European currency was supported last week by news of further strong growth in industrial production in the eurozone. Data released on Friday showed that production in the eurozone rose by 1.7 percent month-on-month and 1.4 percent year-on-year, while in the EU27, growth was 1.8 and 1.5 percent, respectively.
“The significantly better-than-expected report on industrial production in the eurozone in January gave wings to the euro,” says Jane Foley, an analyst at Forex.com.
Support for the euro also came from Greece, where the local parliament approved a new package of stringent measures to increase taxes and reduce spending to combat the debt crisis that threatened the country and harmed the credibility of the euro in international markets. Despite a wave of protests on the streets of Athens in recent weeks, the step forward in addressing the swollen deficit of the Greek budget, which reached 13 percent of gross domestic product, has encouraged investors.
