Market Overview

Euro Steady Despite Soft GDP Data

Euro Steady Despite Soft GDP Data
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The euro was steady near $1.34 to finish the week despite disappointing GDP data released on Thursday.

The common currency traded at $1.3378 at 8:00 GMT as the dollar faltered because of soft jobs data.

The dollar was under some pressure after the Labor Department released its report for initial jobless claims, which rose by 21,000 last week.

The figure was higher than expected and disappointing, as investors expect that improvement in the job market will be key to the Fed raising interest rates.

Although the number of claims rose last week, it is still well below last year’s figures and near an eight-year low.

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Meanwhile eurozone data also disappointed after the bloc released GDP data showing little to no growth across the region. The bloc as a whole was flat in the second quarter, with several member states posting contractions.

Most concerning was the German economy, which declined by 0.2 percent despite forecasts of unchanged growth. 

German officials have blamed the mild winter as well as ongoing problems in the Middle East and Eastern Europe, saying the nation would likely return to growth in the third quarter.

However, according to Reuters, things may only get worse for the bloc in the third quarter as outside factors weigh heavily on the eurozone economy.

With new, tougher sanctions against Russia restricting business activity with one of the eurozone’s largest trading partners, many economists see a troubled future.

In light of the challenges facing the bloc, most expect to see the European Central Bank maintain its loose monetary policy through 2015 and possibly take further action if the weakness persists. 

Posted-In: European Central BankNews Eurozone Forex Global Federal Reserve Pre-Market Outlook Markets Best of Benzinga


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