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Forex - EUR/USD hits fresh daily low as German GDP disappoints

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Forexpros - The euro was down against the U.S. dollar on Tuesday, pulling back from the previous day's three-week high after disappointing German economic data, while markets awaited a key meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy later in the day.

EUR/USD hit 1.4373 during late Asian trade, the daily low; the pair subsequently consolidated at 1.4380, slumping 0.44%.

The pair was likely to find support at 1.4149, the low of August 12 and short-term resistance at 1.4476, Monday's high and a three-week high.

Preliminary data released earlier showed that Germany's gross domestic product increased by a seasonally adjusted 0.1% during the second quarter, below expectations for a 0.5% increase.

The previous quarter's figure was revised down to growth of 1.3% from a previously reported 1.5% increase.

Year-on-year, German GDP grew at an annualized rate of 2.7%, after rising at a rate of 4.7% in the previous quarter and below expectations for a 3.1% gain.

Meanwhile, markets were awaiting a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Paris later in the day.

On Monday, German government spokesman Steffen Seibert said the introduction of euro bonds will not be on the agenda, while adding that it did not expect a major breakthrough from the meeting.

Elsewhere, the euro was fractionally lower against the pound, with EUR/GBP slipping 0.05% to hit 0.8806.

Later in the day, the euro zone was to publish preliminary data on GDP as well as data on its trade balance, while the U.S. was to produce official data on building permits and housing starts. The U.S. is also to release data on import prices, the capacity utilization rate and industrial production.

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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.

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