Eurozone Q3 GDP growth confirms at 0.2% QoQ, as expected
Eurozone Q3 Gross Domestic Product (GDP) came in at 0.2% on a quarterly basis, similar to preliminary estimates, Eurostat reported.
On an annualized basis, the GDP growth remained higher at 1.4%, compared to the estimates and the flash reading of 1.3%.
Market reaction
EUR/USD faces slight selling pressure after the release of the Eurozone Q3 GDP data, and drops to near 1.1620 during the press time.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.12% | 0.21% | 0.12% | 0.03% | 0.07% | -0.41% | -0.08% | |
| EUR | -0.12% | 0.09% | -0.02% | -0.08% | -0.04% | -0.53% | -0.19% | |
| GBP | -0.21% | -0.09% | -0.10% | -0.18% | -0.13% | -0.63% | -0.29% | |
| JPY | -0.12% | 0.02% | 0.10% | -0.05% | -0.02% | -0.52% | -0.17% | |
| CAD | -0.03% | 0.08% | 0.18% | 0.05% | 0.03% | -0.44% | -0.10% | |
| AUD | -0.07% | 0.04% | 0.13% | 0.02% | -0.03% | -0.49% | -0.15% | |
| NZD | 0.41% | 0.53% | 0.63% | 0.52% | 0.44% | 0.49% | 0.34% | |
| CHF | 0.08% | 0.19% | 0.29% | 0.17% | 0.10% | 0.15% | -0.34% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
This section was published at 07:30 GMT as a preview of the Eurozone Q3 GDP data.
The Eurozone Q3 GDP Overview
Eurostat is set to release preliminary Q3 Gross Domestic Product (GDP), seasonally adjusted data, for the Eurozone at 10:00 GMT on Friday.
The flash Eurozone GDP is expected to hold steady at 0.2% quarter-over-quarter (QoQ) growth in the third quarter, while annual growth is projected to stay at 1.3% growth for the same period.
How could the Eurozone Q3 GDP affect EUR/USD?
The EUR/USD pair is expected to continue its winning streak that began on November 5, following the release of Eurozone Q3 GDP data. The Euro (EUR) receives support against its peers as traders expect the European Central Bank (ECB) to remain cautious regarding its monetary policy outlook. The ECB is widely expected to keep rates unchanged, supported by stable economic performance and inflation near target. Traders will also likely observe the preliminary Employment Change data for the third quarter.
The EUR/USD pair also gains support as the US Dollar (USD) stays subdued amid uncertainty over delayed US economic data following the prolonged government impasse. National Economic Council Director Kevin Hassett warned that some October data may “never materialize” because several agencies were unable to collect information during the shutdown.
Technically, the EUR/USD pair is trading around 1.1650 at the time of writing. The technical analysis of the daily chart suggests an ongoing bullish bias as the 14-day Relative Strength Index (RSI) is positioned above the 50 mark. The pair may explore the resistance region around the seven-week high of 1.1778, reached on October 1. On the downside, the immediate resistance appears at the 50-day Exponential Moving Average (EMA) of 1.1623, followed by the confluence support area around the psychological level of 1.1600 and the nine-day EMA at 1.1590.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
