Economic Data from Germany Delivers EUR Support
Economic data from the Eurozone was on the busier side this morning with GDP and business climate figures in focus this morning.
German GDP
In the 1st quarter, the German economy contracted by 1.8%, quarter-on-quarter, down from a prelim 1.7%. In the 4th quarter of last year, the economy had expanded by 0.5%.
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According to Destatis,
- Household final consumption expenditure fell by 5.4%, quarter-on-quarter.
- Government final consumption expenditure rose by a modest 0.2%.
- Gross fixed capital formation in construction rose by 1.1%, while GFCF in machinery and equipment slipped by 0.2%.
Year-on-year, the economy contracted by 3.1%.
IFO Business Climate
In May, the IFO Business Climate Index increased from 96.6 to 99.2. Economists had forecast an increase to 97.8.
Optimism improved, with the Business Expectations Index rising from 99.2 to 102.9. Assessment of current conditions also improved, with the Current Assessment Index climbing from 94.2 to 95.7.
Economists had forecast increases to 101.4 and to 95.5 respectively.
According to the IFO survey,
- In manufacturing, the index rose modestly, with expectations falling, while firms remained satisfied with current conditions.
- For the services sector, the Business Climate Index climbed to its highest level since Feb-2020. A marked rise in optimism and improved sentiment towards current conditions supported the upswing.
- The index for trade was also on the rise. Firms were less pessimistic about what lies ahead, with sentiment towards the current situation seeing further improvement.
Market Impact
Ahead of the numbers the EUR had fallen to a pre-stat and current day low $1.22116 before rising to a pre-stat high $1.22315.
In response to today’s stats, the EUR rose from $1.22207 to a post-stat and current day high $1.22666.
At the time of writing, the EUR was up by 0.37% to $1.22610.
Next Up
Consumer confidence figures from the U.S.