FRANKFURT, Germany: The 15-nation euro rose Tuesday against the US dollar despite more discouraging economic news from Germany, Europe s largest economy. In afternoon European trading the euro bought $1.5615, up from $1.5499 the night before in New York. The British pound strengthened to $1.9705 from $1.9599 late Monday, while the dollar lost some ground to purchase 107.51 Japanese yen from 107.84 in New York. The euro gain came despite a report from the Nuremberg-based GfK agency showing that German consumer confidence dropped in its forward-looking assessment for July, hitting the lowest level since December 2005. Repeated announcements of new record petrol and diesel prices have compounded fears of a loss of purchasing power, the Nuremberg-based agency said. Rising fear of inflation, combined with the sustained crisis in the financial markets, a strong euro and a weaker global economy mean that consumers are not very upbeat in their assessments of future economic growth, GfK s report said. All three of GfK s subindexes, which refer to current conditions, also fell. German consumers have now really thrown in the towel, said Andreas Rees, chief German economist at Munich s Unicredit. The major triggers were higher food prices and especially the record-high gasoline price. Admittedly, driving to a gas station had already not been a pleasure over the last few years. But now it was really torture for Mr. Average Citizen. We think that part of the equation is also the loss of confidence in the future growth outlook, Rees said.
