Eurozone's preliminary GDP expands by 0.2%, beats estimates of 0.1%
Eurozone's preliminary Gross Domestic Product (GDP) rose by 0.2% in the third quarter of the year, faster than estimates and the prior reading of 0.1%.
On an annualized basis, the major continent expanded at a faster pace of 1.3% against estimates of 1.2%, but slower than the former release of 1.5%.
Market reaction
EUR/USD continues to hold 0.15% gains around 1.1615 during the European trading session on Thursday.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.15% | 0.07% | 0.74% | 0.03% | 0.06% | -0.09% | -0.12% | |
| EUR | 0.15% | 0.22% | 0.89% | 0.19% | 0.21% | 0.07% | 0.03% | |
| GBP | -0.07% | -0.22% | 0.65% | -0.04% | -0.01% | -0.16% | -0.19% | |
| JPY | -0.74% | -0.89% | -0.65% | -0.73% | -0.67% | -0.85% | -0.89% | |
| CAD | -0.03% | -0.19% | 0.04% | 0.73% | 0.04% | -0.12% | -0.16% | |
| AUD | -0.06% | -0.21% | 0.01% | 0.67% | -0.04% | -0.14% | -0.18% | |
| NZD | 0.09% | -0.07% | 0.16% | 0.85% | 0.12% | 0.14% | -0.02% | |
| CHF | 0.12% | -0.03% | 0.19% | 0.89% | 0.16% | 0.18% | 0.02% |
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 below was published at 09:04 GMT to cover the release of the flash German HCOB PMI data for October
Preliminary GDP growth in the German economy remained flat in the third quarter of the year, as expected, after declining by 0.3% in the second quarter.
On an annualized basis, the economy expanded 0.3%, as expected, faster than 0.2% seen in the similar quarter of the previous year.
Market reaction
EUR/USD faces slight pressure after the German GDP data. Still, the pair is 0.15% higher at around 1.1615 from its previous close.
This section below was published at 07:33 GMT to cover the release of the flash German HCOB PMI data for October
The German/Eurozone Q3 GDP Overview
The Federal Statistics Office of Germany is set to release preliminary Q3 Gross Domestic Product (GDP) data for Germany at 09:00 GMT, and Eurostat will likely report flash Eurozone GDP figures for the same period at 10:00 GMT on Thursday.
Germany’s preliminary GDP is expected to remain flat at 0% quarter-over-quarter (QoQ) in the third quarter, after contracting 0.3% in the previous quarter. Meanwhile, the economy is expected to expand at 0.3% year-over-year (YoY) in Q3, following the previous expansion of 0.2%.
The seasonally adjusted flash Eurozone GDP is expected to hold steady at 0.1% QoQ growth in Q3, while annual growth is projected to slow to 1.2% from 1.5% previously.
How could the German/Eurozone Q3 GDP affect EUR/USD?
The EUR/USD pair remains steady after the release of GDP data from Germany and the Eurozone as traders adopt caution ahead of the European Central Bank (ECB) interest rate decision due later in the day. The ECB is expected to hold rates steady for a third straight meeting in October, with no policy changes likely in 2025. Unemployment data from Germany and the Eurozone, along with German Consumer Price Index (CPI) figures, will also be eyed.
The EUR/USD pair holds ground following the highly anticipated meeting between US President Donald Trump and China’s President Xi Jinping in South Korea. President Trump announced that tariffs on China will be reduced to 47% from the current 57%. Trump added that the rare earth dispute has been resolved, ensuring no further restrictions on China’s rare earth exports. Furthermore, Chinese President Xi Jinping said that “two sides should look at the long-term interests of cooperation.
The US Dollar (USD) remains subdued due to uncertainty surrounding the Federal Reserve (Fed) policy stance in December. Policymakers made a mental note of a general increase in some inflationary pressures through the second half of the year, but not enough to deter another leg down in interest rates. However, Fed Chair Jerome Powell stated that another rate cut in December is far from certain.
Technically, the EUR/USD pair is trading around 1.1610 at the time of writing. The technical analysis of the daily chart suggests an ongoing bearish bias as the 14-day Relative Strength Index (RSI) remains below the 50 mark. The pair may find its initial support at the two-month low of 1.1542, last recorded on October 14. On the upside, the immediate resistance lies at the nine-day Exponential Moving Average (EMA) of 1.1626, followed by the 50-day EMA at 1.1656.
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.
