The Euro falls as Eurozone Finance Ministers don’t expand the stability fund

At the Eurozone finance ministers' meeting in Brussels yesterday they decided, with Germany's insistence, to halt the expansion of the European Union's european financial stability fund. Whilst Germany was probably not the only objector, German Chancellor Merkel made clear in the last few days her opposition to the proposal so it was dead in the water before it begun.

Instead, ministers resolved to do...nothing. They ended their five-hour discussion with an agreement that the existing fund was ample to deal with any fresh problems that may arise and, anyway, there wouldn't be any. The markets were rather underwhelmed and the Euro started to slide against a rising US Dollar and faltering Sterling.

It was not a particularly good outcome for anymore making Sterling currency transfers given the day's mainly positive UK economic data. Industrial production was the weak link, falling by -0.2% in October to lower an annual rate of growth 3.3%. The manufacturing production number was good though, in line with the 16-year high for the sector whilst manufacturing production rose by 0.6% on the month and up to 5.8% annually.

The National Institute of Economic and Social Research (NIESR) gave Sterling the boost it needed with its estimate that the UK economy grew by 0.6% in the three months to November and a comment that the figure weakened the case for renewed quantitative easing.

The Bank of Canada's decision to keep its policy interest rate steady at 1% coincided with a decline for the Canadian Dollar but the two events are not necessarily related, given that the rate decision was in line with expectations.

The only UK figure today is the CBI's industrial trends survey, which tracks manufacturers' current and expected orders. All we expect from Euroland is German industrial production while Canada's contribution is housing starts. Tonight the Reserve Bank of New Zealand is fully expected to keep its overnight cash rate steady at 3%.