The euro and British pound both made headway against the US dollar and Canadian dollar on Thursday, but only the former had relevant news on the wires. Data showed that the economic contraction in the Euro-zone slowed markedly during Q2 as the advanced reading of GDP only fell by 0.1 percent, following a 2.5 percent drop in Q1. The news was much better than forecasts for a 0.5 percent decline, which helped push the year-over-year rate of growth up to -4.6 percent from -4.9 percent. A breakdown of the index shows that a 0.3 percent increase in GDP in Germany and France, the first and second largest economies in the Euro-zone, helped buoy the overall number thanks to improvements in export demand. That said, there will be two more rounds of estimates to Q2 GDP (preliminary and final), so traders should beware of revisions. Nevertheless, the data supports the more neutral stance the European Central Bank has started to undertake.
Related Article: Euro Weekly Trading Forecast
Al Bawaba
