"Maybe there is even potential on the upside (to our forecasts). Maybe some countries like Germany, like Austria, might reach the 2 percent growth. We are still cautious in that our prediction is a bit lower but that might be something to be expected."
- Ewald Nowotny, European Central Bank Governing Council member
Tuesday, January 14, was a good day to buy the single currency, as EUR/USD pair hit an intraday high of 1.3696 on comments from one of ECB members, Ewald Nowotny, who pointed out the Eurozone can post stronger-than-expected growth this year. At the same time, industrial production surprised markets to the upside, pushing the shared currency higher.
Industrial output in the 18-nation bloc hiked 1.8% in November, recovering from a 0.8% drop seen in October. The data also came above analysts' forecasts, who projected only a 1.4% gain. On a yearly basis production inched higher 3.0%, also stronger than initially was expected. The increase was spread across a number of industries, including manufacturers of capital goods, makers of non-durable and intermediate goods. Nonetheless, a report showed that consumers are still not ready to make large purchases.
Also Monday Ewald Nowotny, the ECB Governing Council, said the region will experience differing rates of expansion this year; however, the whole Eurozone will grow around 1% in 2014. Nowotny also said there is a high possibility growth will be even higher. Growth will be led by Germany and Austria, which both will log a 2% expansion. Meanwhile, the fact banks have started to repay LTRO money can also be interpreted as a positive sign.
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