Euro rate today: EUR sees mixed fortunes as Germany, France and Italy release subdued GDP figures

A look at the forex markets shows the euro dollar exchange rate is 0.22 pct in the red at 1.3458. The euro pound exchange rate is meanwhile 0.07 pct lower at 0.8393.

The euro is trading higher against the Australian dollar by 0.29 pct at 14454 and a touch higher against the NZ dollar at 1.6288.

Please keep in mind all quotations here are inter-bank spot rates. Your retail rate will be delivered with a spread being subtracted by your bank at their discretion. This is a competitive market though and the good news is that an independent FX provider will seek to beat your bank's rate, thus delivering up to 5% more FX. Please learn more here.

Eurozone GDP releases make for sombre reading, but euro rates won't care

We have a host of GDP data releases from the largest Eurozone countries to consider this morning.

There is little to instil confidence, yet the impact on the EUR is likely to be muted as the shared currency plays by its own rules!

"The technical correction that is expected to emerge from GDP data across the eurozone for 3Q13 is unlikely to spark any sustained EUR retreat. We expect EUR-USD to trade mostly close to 1.34 again today," says a note from UniCredit.

France GDP
Gross Domestic Product (YoY) (Q3): +0.2%, last month 0%.
Gross Domestic Product (QoQ) (Q3): -0.1%, expected +0.1%, last month +0.5%.
Germany GDP
Gross Domestic Product (YoY) (Q3): +1.1%, expected +0.7%, last month +0.9%.
Gross Domestic Product (QoQ) (Q3): +0.3%, expected +0.3%, last month +0.7%.
Italy GDP
Gross Domestic Product (YoY) (Q3): -1.9%, expected -1.8%, last month -2.2%.
Gross Domestic Product (QoQ) (Q3): +0.1%, expected -0.1%, last month -0.3%.

What does the GDP data mean?

The European recovery has suffered a serious setback after both Germany and France released GDP data that missed forecasts.

In fact, France saw their economy shrink by 0.1% in the three months through September. This comes after President Francois Hollande failed to revive corporate investment in the face of one of the world’s heaviest tax burdens.

"The figures, which follow France’s exit from recession in the second quarter, underline the issues Hollande is confronting as he tries to revive Europe’s second-largest economy and reverse an increase in unemployment that’s at a 14-year high. German GDP rose 0.3% in the same period after rebounding in the second quarter from a winter-induced slowdown," says Max Cohen at Spreadex.

The German economy is returning to a more moderate pace of expansion, according to the Bundesbank.

"That may restrain the pace of expansion in the euro area as countries including Italy and the Netherlands struggle to emerge from a recession. Growth in the third quarter was driven exclusively by domestic demand, whilst investment in equipment and construction increased, and private and government consumption rose slightly," says Cohen.

From a currency perspective we note that despite the fact that the Eurozone is clearly under-performing the likes of the US and the UK investors will likely continue buying European assets in anticipation of a recovery. This should keep EUR underpinned for the time being. But, this will likely eventually ease and combined with a US Fed teper, we will start to see more extended Euro losses.