Euro Tumbles as German Industrial Data Disappoints, ECB Cautions on Le Pen

Frankfurt (Feb 7)  The euro fell to a one-week low after weaker-than-expected economic data from Germany and ongoing concerns over the direction of elections in France.

The euro traded 0.75% lower in early European dealing against the U.S. dollar and was marked at 1.0667 at 09:10 GMT, the lowest level since Jan. 30.

Industrial production in Europe's biggest economy fell sharply in December, Germany's statistics office said Tuesday, with activity falling 3% from the previous month, the biggest decline in nearly eight years.

"Orders in manufacturing and construction and also sentiment indicators in these sectors are signalling a revival of output growth in coming months," the Economy Ministry said in a statement alongside the release, and Monday's factory orders data, which increased at the fastest pace in two and a half years, likely supports that case.

Investors, however, are slightly on edge owing to both extreme currency market volatility and a seemingly unprecedented surge in populist politics in the world's biggest economies.

This is no more true than in France, where two major surveys over the weekend suggested far right candidate Marine Le Pen could win as much as 25% of first round voting support when France heads to the polls on April 23, but note that this support would fall to around 37% in the subsequent second round on May 7 as voters opt for the independent candidate, former Economy Minister Emmanuel Macron.

Le Pen's popularity, however, is gaining ground and investors are wary of a "Trump-like" surge in the final months of campaigning, particularly given the recent attack at the Lourve Museum in central Paris, which police say was carried out by an Egyptian national who arrived in France only last month.

Source: TheStreet