Euro Appreciates As Eurozone Economic Growth Beats Forecasts
30 July 2021 - 6:12PM
RTTF2
The euro climbed against its most major counterparts in the
European session on Friday, as the euro area economy expanded more
than forecast in the second quarter, signaling that the bloc's
recovery is under way.
Flash estimate from Eurostat showed that gross domestic product
expanded 2 percent sequentially, reversing the 0.3 percent drop
posted in the preceding period. The growth rate was bigger than the
expected 1.5 percent.
On a yearly basis, GDP rebounded 13.7 percent after shrinking
1.3 percent in the first quarter. GDP was forecast to grow 13.2
percent.
Separate data from Eurostat showed that Eurozone inflation
accelerated more-than-expected in July, largely driven by higher
energy prices.
Inflation rose to 2.2 percent in July from 1.9 percent in June.
The rate was above the expected 2 percent.
A falling dollar on the back of the Fed's reassurance that rate
increases were far off also underpinned the euro.
The euro spiked up to more than a 4-week high of 1.1909 against
the greenback and a 3-day high of 0.8524 against the pound, off its
prior lows of 1.1875 and 0.8509, respectively. The euro is seen
finding resistance around 1.22 against the greenback and 0.86
against the pound.
The euro rose to 130.50 against the yen and 1.7005 against the
kiwi, recovering from its early low of 130.02 and a 3-day low of
1.6933, respectively. The next possible resistance for the euro is
seen around 132.00 against the yen and 1.72 against the kiwi.
The euro jumped to more than a 7-month high of 1.6165 against
the aussie, after falling to 1.6061 at 11 pm ET. On the upside,
1.64 is possibly seen as the next resistance level for the
euro.
In contrast, the euro fell to its lowest level since January 29
against the franc, at 1.0762. The euro is likely to find support
around the 1.045 level.
After rising to 1.4820 in the Asian session, the euro eased off
and held steady against the loonie. At yesterday's close, the pair
was worth 1.4786.
Looking ahead, Canada GDP data for May, U.S. personal income and
spending data for June and University of Michigan's final consumer
sentiment index for July will be featured in the New York
session.
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