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Forex - Euro little changed as euro zone growth stalls

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Investing.com -

Investing.com - The euro was little changed near nine month lows against the dollar on Thursday after data showed that economic growth in the euro zone stagnated in the second quarter, indicating that the economic recovery in the region has stalled.

EUR/USD was steady at 1.3365, off session lows of 1.3349.

The pair was likely to find support at around the 1.3300 level and resistance at 1.3385.

The euro showed little reaction after preliminary data showed that euro zone gross domestic product failed to grow in the three months to June. Economists had expected a small expansion of 0.1%.

Germany's economy shrank by 0.2% in the three month to June, the first drop since 2012 and worse than forecasts for a contraction of 0.1%.

French GDP was flat in the second quarter, the second consecutive quarter of stagnation.

The weak data indicated that the economic recovery in the euro area is losing momentum, adding to pressure on the European Central Bank to do more to bolster growth after it cut rates to record lows in June.

A separate report showed that the annual rate of euro area inflation came in at 0.4% in July, in line with forecasts and unchanged from the preliminary estimate.

But consumer prices declined 0.7% from a month earlier compared to forecasts for a 0.6% drop, after a 0.1% gain in June.

The euro was also steady against the yen and the pound, with EUR/JPY at 136.95 and EUR/GBP close to six-week highs at 0.8012.

Sterling remained under pressure after the Bank of England cut its wage growth forecast for this year in half on Wednesday and said that the rate of pay growth would be a key factor in determining how quickly interest rates will rise.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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