For the first time in a while, most of the attention during today’s European session was focused on France. France announced during the budget presentation today that they would cut their debt issuance for 2013 to 171.1 billion Euros, down from the182.8 billion Euros of planned debt issuance in 2012. Additionally, the budget projected 0.3% GDP growth in 2012 and 0.8% growth in 2013. France’s Finance Minister Moscovici said that keeping a 3% deficit target is crucial.
The budget announcement followed an earlier release of French GDP for Q2 at 0.0%, following Q1’s non-existent growth. Therefore, the budget is predicting a pickup in growth before the end o the year. French Finance Minister Moscovici said earlier today that if Europe stabilizes, the country’s economy could see at least 0.8% growth in 2013. Neither the French budget forecast nor the GDP release had a significant impact on Euro trading.
The only news of the day that seemed to drive the Euro was a higher than expected estimation of annual Euro-zone inflation in September. EURUSD climbed above 1.2950 following the release, before losing most of the gains later in the session. Support and resistance might be provided respectively by the 1.2900 and 1.3000 figures.
At 6PM Madrid time, Spain will announce the result of the stress test of their banks. German government spokesman Steffen Seibert said earlier today that direct recapitalization of the banks, without adding to the government’s deficit, will only be possible after joint supervision of the banks by the ECB. Merkel said earlier today, that the crisis can’t be fought by piling up more debt.
In the North American session, the Canadian GDP for July will be announced at 12:30 GMT.
EURUSD 1-hour: September 28, 2012
--- Written by Benjamin Spier, DailyFX Research
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