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As the Euro slumps going into 2014, the French economy seems to be picking up. Reports are showing that the French economy has grown by 0.1% from July to September. Moreover, metrics later indicated that the growth topped out at 0.6%. All this while the Euro has been slumping against the U.S. dollar. How are these two things connected?

While French consumers were shown to have spent 1.4% more than they did in the previous quarter, the Euro still appears to be stumbling against the U.S. dollar, based mostly on figures that showed that the British Pound was improving.

The UK mortgage market has seen an uptick in activity due in large part to a greater availability of home loans. These are the highest availability numbers since 2009, and the consumer spending on mortgages has caused the Pound to strengthen even as the Euro is slumping.

Changes in the money markets over the winter holidays have caused the sterling to take a slight dip when durable goods sales were stronger than expected. This also caused the Euro to slip due to is connection to the Pound. The Pound was reaching daily highs when mortgage activity was so strong, and the Bank of England is even considering raising interest rates as the British economy improves.

Even as these changes happen, gold prices started to fall slightly. The price of an ounce of gold fell from around $1200 to $1199.20. While this may seem slight, the spot price of gold changing at all is a sign that only few economies are recovering.

Gold and silver, along with other commodities fell to unbelievable levels in 2013 as the markets tried to stabilize themselves. Even as precious metals were falling for the first eleven months of the year, the International Monetary Fund has predicted that the commodities will rise along with global economies by 3.6%. The anticipated growth for 2013 was 2.4%.

Though the predictions may have been off for 2013, the rise in the French economy along with the Bank of England’s plans to raise interest rates are cause for hope going into 2014 and the following years.

Even while the U.S. dollar surges ahead of the Euro, the Pound can easily keep pace on better economic figures in the hopes that that will spurn the Euro and the rest of the Euro-zone to a more healthy fiscal year in 2014 and beyond.

source: iforex.in



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July 2024