Euro Eases Gently After Poor Eurozone GDP Data, Italy in Recession
EUR price, news and analysis:
- Eurozone GDP growth in the fourth quarter of 2018 was unchanged from Q3’s 0.2% increase quarter/quarter, staying at its lowest rate in four years.
- Italian GDP data showed the country is now in a technical recession.
- The Euro eased slightly on the figures but continues to be driven principally by events in the US and by the Brexit negotiations between the UK and the EU.
Euro slips on Eurozone GDP data
Economic growth in the Eurozone was just 0.2% quarter/quarter in the fourth quarter of last year according to preliminary “flash” data. That was the same growth rate as in the third quarter and was in line with expectations, showing growth stuck at its lowest rate in four years.
Meanwhile in Italy GDP contracted by 0.2% quarter/quarter in Q4 after a 0.1% fall in Q3, putting Italy into a technical recession.
EURUSD Price Chart, Five-Minute Timeframe (January 30-31, 2019)
Chart by IG (You can click on it for a larger image)
Looking ahead though, the Euro will likely be driven principally by events in the US. As the chart above shows, EURUSD jumped late Wednesday after more dovish than expected comments from the Federal Open Market Committee. The Fed kept US interest rates unchanged, as expected, but also signaled a potential end to rate hikes.
As for EURGBP, that will likely be driven largely by the Brexit negotiations between the EU and the UK.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.