Europe’s brittle economies shrank at their fastest rate since the collapse of Lehman Brothers four years ago, official data for the fourth quarter showed yesterday, intensifying global woes as Japan also failed to escape from its own recession.
The euro fell 1 per cent against the dollar at news of the eurozone’s 0.6 per cent quarter-on-quarter fall in gross domestic product, deepening the bloc’s recession, and poor country-by-country performances . Japan’s economy, meanwhile, contracted 0.1 per cent in the final three months of the year.
Strong appreciation of the single currency has fuelled fear that a nascent recovery for the bloc may be in jeopardy. The euro’s relative strength is amid tensions that loose monetary policy adopted by major central banks worldwide could spill over into a series of competitive currency devaluations.