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An Economic Data Deluge Delivers EUR Support as the Eurozone Economy Bounces Back

Following interest in the German economy through much of the week, it was the Eurozone and member state economies in focus this morning.

The numbers were skewed to the positive, supporting market optimism.

Member States

In the 2nd quarter, the French economy expanded by 0.9%, quarter-on-quarter, reversing a 0.1% contraction in the previous quarter.

The German economy expanded by 1.5%, partially reversing a 2.1% contraction from the 1st quarter.

Italy and Spain also saw growth in the quarter.

In the 2nd quarter, the Spanish economy grew by 2.8%, reversing a 0.4% contraction from the 1st quarter. Stats from Italy were also positive, with the economy growing by 2.7%. In the 1st quarter, the economy had grown by just 0.2%, quarter-on-quarter.

The Eurozone

In the 2nd quarter, the Eurozone economy grew by 2.0%, quarter-on-quarter, reversing a 0.3% contraction from the previous quarter.

Year-on-year, the economy grew by 13.7% after having contracted by 1.3% in the previous quarter. Economists had forecast a 12.6% increase.

Inflation figures were also in focus, with the annual rate of inflation ticking up from 1.9% to 2.2%. Economists had forecast an annual rate of inflation of 2.0%.

The pickup in inflationary pressures muted unemployment figures for the Eurozone, however. In June, the Eurozone’s unemployment rate slipped from 8.0% to 7.7%. Economists had forecast a fall to 7.8%.

While the economy was in recovery, the need for a consumer driven recovery remains in question as inflationary pressures build.

Market Impact

In response to today’s stats, the EUR fell to a low $1.18751 before climbing to a post-stat and current day high $1.19087.

At the time of writing, the EUR was up by 0.09% to $1.18974.

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