Euro Area Growth Ticks Higher; EUR/USD Holds Above 1.1000
The Euro Area economy expanded by 0.3% in Q2, according to the latest Eurostat data, slightly more than the 0.2% market forecast. Last month’s data was revised down to -0.1% from 0%, balancing the two quarters out. According to Eurostat, amongst the Member States for which data are available for the second quarter of 2023, Ireland (+3.3%) recorded the highest increase compared to the previous quarter, followed by Lithuania (+2.8%). Declines were recorded in Sweden (-1.5%), in Latvia (-0.6%), in Austria (-0.4%) and in Italy (-0.3%).
Core Euro Area inflation, y/y, remained unchanged at 5.5% in July, missing expectations that price pressures would ease back to 5.4%.
The Euro was unmoved by today’s data and with the holiday season now in full flow, price action may be limited in the coming days. EUR/USD has bounced back above 1.1000 after having made a 1.0944 low on Friday and the pair will likely be driven by the dollar in the days ahead. The main US economic release this week will be Friday’s Labor Report (NFP). The headline figure is expected at 200k while average earnings are expected to turn lower.
EUR/USD Daily Price Chart – July 31, 2023
Chart via TradingView
Retail trader data shows 49.51% of traders are net-long with the ratio of traders short to long at 1.02 to 1.The number of traders net-long is 1.79% higher than yesterday and 32.05% higher from last week, while the number of traders net-short is 0.72% higher than yesterday and 30.46% lower than last week.
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