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Eurozone GDP Data Confirmed: EUR/USD Consolidates

Demand for the U.S. dollar remains relatively high, while one couldn’t say the same about the euro in early Friday’s trading, as investors had concerns over the subdued growth of the eurozone.

eur/usd grows

The greenback was also buoyed by Fed’ statement posted on Thursday that it is going to reduce ahead of schedule, the volume of open market operations, which would limit liquidity in the U.S. markets.

The euro gained 0.09 percent, versus the U.S. dollar, to 1.0851 at 1348 GMT, declining to 1.0828 overnight, registering thus the weakest result since April 2017. 

As for the dollar index, which is tracking the greenback value against a basket of its main 6 rivals by 0.03 percent, to 99.09, whereas earlier this reading was at 98,95, the level, last time seen more than 2 years ago.

The UK’s pound eased versus the U.S. dollar by 0.18 percent, to 1.3022 at 1356 GMT, trading relatively calm.

gbp/usd slips

Meantime, the fresh data on Germany’s GDP, being viewed as the largest economy of the region, confirmed the stagnation, at 0 percent in Q4, though in Q3 it was registered an upward revised number of a 0.2 percent rise, though analysts expected 0.1 percent increase. 

The country was in a resting state long before the coronavirus threat.

Recall, in December, Germany showed the sharpest decline in industrial activity since the global financial crisis a more than a decade ago.

The additional pressure for this dull data were the gloomy prospects for the European economy with the European Commission doing nothing to improve the mood around the euro, as analysts at Danish Danske Bank noted. By the way, it revised the GDP growth forecast for eurozone downwards from 0.9 percent to 0.8 percent in 2020.

The latest Eurozone growth data confirmed to grow by 0.1 percent in Q4, being in line with analysts expectations, whereas the previous quarter reading was of a 0.3 percent growth.

As for the annual rate the eurozone GDP rate reached a 0.9 percent growth, being above analysts expectations of a 1.0 percent rise. 

The situation in the U.S. economy, as a counterweight to recent data from Europe,  is going well: there is nothing surprising in the fact that the dollar as a single currency, which does not turn to be in such a difficult situation. That's quite understandable with the recent U.S. employment data, which proved to be strong enough, while annual GDP growth was of 2 percent increase last year, and the Fed felt confident not the less regarding banking sector to further reduce repo transactions.


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  • avatar-2648
    Andrew.trader
    • #

    The GDP data it is not the only one shaker for the euro, its drifting around all-time lows.


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