Investing.com - The euro fell to fresh two year lows against the dollar on Monday as weak data from Japan, China and the euro zone hit market sentiment and boosted demand for the broadly stronger dollar.
EUR/USD hit lows of 1.2279, the weakest level since August 16, 2012.
Data released on Monday showed that Japan’s third quarter economic contraction was deeper than initially estimated.
Revised data showed that Japan’s gross domestic product contracted by an annualized 1.9%, more than the preliminary estimate of a 1.6% decline.
On a quarter-over-quarter basis the economy contracted by 0.5% in the three months to September, compared to a preliminary estimate of a 0.4% contraction.
A separate report showed that Chinese exports rose just 4.7% in November from a year earlier, less than the expected 7.9% increase, while imports fell 6.7% on a year-over-year basis. The weak data added to concerns over a slowdown in the world’s second-largest economy.
In the euro zone, data showed that German industrial production rose just 0.2% in October, while September’s figure was revised down to 1.1% from 1.4% previously. The data fuelled concerns over the outlook for fourth quarter growth.
Demand for the dollar continued to be underpinned after Friday’s particularly strong jobs report for November highlighted the diverging economic recovery between the U.S. and the rest of the world.
The U.S. economy added 321,000 jobs in November, far more than the 225,000 forecast by economists and the largest monthly increase in almost three years.
September’s figure was revised up to 243,000 from a previously reported 214,000 and the unemployment rate remained unchanged at a six-year low of 5.8%.
The unusually strong data saw investors bring forward expectations for the first hike in U.S. interest rates to mid-2015 from September 2015 before the report.
The euro was weaker against the yen, with EUR/JPY down 0.52% to 148.46, off the six-year peaks of 149.77 struck overnight.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, hit a peak of 89.57, the strongest level since March 2009.