(RTTNews) - Wednesday, the euro slumped to a new multi-day low against the Swiss after a monthly survey from GfK Group showed that the German consumer confidence declined unexpectedly for December.

The forward-looking consumer confidence index fell to 3.7 for December from 4 in the prior month. Economists were expecting the index to remain unchanged at 4.

Meanwhile, the euro pared its Asian session gains against the yen and slumped to a new multi-week low, but it surged up against the dollar as the Federal Reserve raised its growth forecasts for the US economy. On the other hand, the euro recovered from a 5-day low against the pound as the latter was weakened by the U.K. GDP report.

GfK's measure of economic expectations slumped to 0.9 from 8.7 in the previous month. An index of income expectations dropped to 6.2 from 12.9, while a gauge of consumers' propensity to spend rose to 26.3 from 26.1.

The decline in sentiment is "primarily a result of growing public fears of rising unemployment," GfK said in a statement. "Although until now it has remained amazingly buoyant, a marked rise in unemployment must be anticipated for the coming months."
German unemployment has declined for four straight months, taking the jobless rate down to 8.1 percent, as government incentives encouraged employers to keep staff. While the economy is recovering from its worst recession since World War II, the slump has increased pressure on companies to cut costs. Unemployment is bound to increase next year, Chancellor Angela Merkel said on Nov. 20.

The euro that bounced between 1.5098 and 1.5105 against the Swiss franc in Asian deals on Wednesday plunged in early European trading. Currently, the euro-franc pair is trading at a 9-day low of 1.5087 with 1.5078 seen as the next target level. At yesterday's close, the pair was quoted at 1.5101.

The euro weakened against the yen after reaching a high of 132.70 at 3:05 am ET Wednesday. At 4:30 am ET, the euro-yen pair touched a new multi-week low of 131.52, compared to 132.47 hit late New York Tuesday. If the pair falls further, it may target the 131.0 level.

Japan's Ministry of Finance revealed that the country recorded a merchandise trade surplus of 801.7 billion yen in October, following the revised 525.3 billion yen surplus in September. Economists expected the trade surplus at 465.5 billion yen. During the month, exports declined 23.2% year-over-year to 5.31 trillion yen, while imports were down 35.6% year-over-year to 4.50 trillion yen, the data revealed.

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