EUR rides high after German GDP - BBH
The euro was already trading firmly before German GDP surprised to the upside and helped lift the single currency through $1.17 for the first time since the ECB meeting in late October, explains the research team at BBH.
Key Quotes
“The 0.8% quarterly expansion lifted the workday adjusted the year-over-year rate to 2.8% from a revised 2.3% in Q2, which is the fastest in six years. Italian Q3 GDP growth was also firm at 0.5%, matching its best pace in seven years. The 1.8% year-over-year pace is also the best since 2011.”
“Against the dollar, the euro is extending the recovery that began last week from about $1.1555 (the lowest level in four months) and is above the 20-day moving average (~$1.1685). We see risk toward $1.1745-$1.1760. We view these euro upticks as corrective in nature and note that the US two-year premium over Germany continues to widen. It stands near 2.43% now, up 40 bp in the past two months.”
“The euro was also boosted by cross rate demand after the softer than expected UK and Swedish inflation.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
