After weak industrial surveys from the region’s
largest economies, most notably Germany and France, euro area industrial
production fell sharply in December.

Industrial output in the 19-nation bloc slipped 2.1
percent in December, while November’s reading was revised lower to 0.0 percent
from a preliminary of 0.2 percent growth. Analysts had predicted a 1.8 percent
drop.

The year-on-year reading also fell dramatically by 4.1
percent, following a previous of -1.7 percent, compared to projections of -2.8
percent.

The fall could be largely attributed to the U.S.-China
trade war and weak domestic demand, where the reading may remain under pressure
in January due to the spread of the coronavirus.

As of 10:40 GMT, the euro traded higher at $1.0918,
but remained close to yesterday’s bottom of $1.0891, which is the lowest since
October 1, 2019.

Later in the day, eyes
will focus on Fed Chair Jerome Powell as he will testify on the Semiannual
Monetary Policy Report before the Senate Banking Committee in Washington DC.

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