German GDP Growth Suffered in 2Q According to Economic Minister
Apparently, the German economy is suffering from the Euro-zone debt crisis. This widely assumed conclusion was stated by the German Economics Minister Phillip Rosler ahead of next week’s 2Q GDP release, which is expected to be +0.1%. Rosler further said that the outlook for global recovery remains fragile. There was no further talk about the next step for the ECB nor the German governments’ intended reaction to a bond purchasing plan, and Rosler’s statement doesn’t necessarily give us any further direction.
Also in Germany, the annual inflation rate was confirmed at 1.7% in July, as consumer prices only rose 0.4% during the month. Additionally, French industrial production in June was unchanged from May’s production levels; this was slightly lower than analysts’ forecasted 0.1% rise.
In the UK, sterling got a small boost when construction output in the second quarter was revised to have only fallen 3.9%, lower than the 5.2% drop reported with the GDP release. This means the 0.7% UK economic contraction may not have been as bad as initially estimated. Sterling corrected from earlier losses against US Dollar following this release and is currently trading back above 1.5600. GBPUSD has been trading in a 140 point range over the week and support could come in near 1.5518, by a two-month upward trend line. Resistance has been provided over the past few months around 1.5750.
Outside of Europe, Japan’s parliament passed the first sales tax increase since 1997. The tax will rise from the current 5% to 10% by 2015. The measure is intended to help Japan reign in its soaring debt. The news of the tax increase did not have a significant effect on Yen trading.
Later today Canada will release its unemployment rate and net change in employment for July, analysts expect 6 thousand more jobs were added and unemployment remains at 7.2%.
GBPUSD 15-minute: August 10, 2012
--- Written by Benjamin Spier, DailyFX Research
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