Investing.com - The euro remained near fresh two-year lows against the dollar on Monday, as comments by European Central Bank Governing Council member Ewald Nowotny further weighed on demand for the single currency.
EUR/USD hit lows of 1.2248 during European afternoon trade, the weakest level since 2012, and was last down 0.15% at 1.2263.
Sentiment on the euro remained vulnerable after ECB Governing Council member Ewald Nowotny warned that the euro zone economy is suffering a "massive weakening" and that there is a "high probability" that euro zone inflation would slow further in the coming months.
The comments came shortly after 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.
Markets were also jittery after revised data on Monday 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.
Meanwhile, 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 0.59% to 148.36, 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 89.56, the strongest level since March 2009.