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Economic Week: A $ = € 0.72 // EU Sees More Growth …

  • September 14th, 2010
  • Posted by EUEditor

doillar-australian.jpegThe European Union economy is having a reviving week with figures out, showing continued recovery … and the Australian currency is having a picnic week, getting a taste of life as a “mighty dollar”.

CAUTIOUS ON EXIT FROM RECESSION

Interim growth figures released in Brussels (13.9.10) are indicating stronger growth than expected across the European Union, moving towards 1.8% for the year.

Monday’s statement from the European Commission:

“The economic recovery in the EU has gained ground of late.

“ GDP growth in the second quarter of 2010 was particularly strong, and more balanced towards domestic demand than previously anticipated.

“While activity is still expected to moderate in the second half of the year, the outlook is for a slightly improved quarterly profile compared to the spring forecast, due to the spill-over of some momentum from the second quarter.

“For 2010 as a whole, real GDP growth is now projected at 1.8% in the EU and 1.7% in the euro area, a sizeable upward revision.

“The recovery remains fragile however, with uncertainty high and developments across Member States uneven.

“The Commission’s inflation forecast for 2010 is broadly unchanged since the spring, at 1.8% in the EU and 1.4% in the euro area.”
The trend confirms expectations set out by EU leaders in recent months, urging faith in the climb-back out of recession; see EUAustralia Online: “EU Economy – so far so good”, 8.9.10; “Stop doubting Europe economy”, 4.8.10; “Europe Day …”, 29.6.10).

A$ ROLLING ALONG

Holders of Australian dollars might well partake of some of that reviving prosperity this week, their money jumping up against major currencies; reflecting fairly robust economic conditions, and the signs of no-change or an increase in interest rates, in Australia.

One A$ is buying 72.5 Euro cents, 60.6 New pence, or 93 US cents; (xe.com. 14.9.10).

The other way around, Australian goods and services stand to be more expensive for now, and making things a degree harder for the country’s own exporters.

Reference

EC, Brussels, “EU interim forecast: Recovery progressing in an uncertain global environment”, 13.9.10, IP/10/1111.