Eurozone Economy

The Euro rose against the Dollar and British Pound on the penultimate session of October, helped by good news regarding the German economy.

Eurozone PMI figures signal the Eurozone's economic downturn accelerated at the start of the year's final quarter, after private sector output declined at the steepest rate for over a decade (pandemic excluded), according to S&P Global.

Germany's largest bank says the domestic economy is set to suffer a double-dip recession sparking a negative feedback loop that will weigh on activity in 2024, ensuring the UK, France, U.S. and Italy will all grow faster.

Euro exchange rates are in focus over the remainder of the week as inflation prints are released from across Europe, starting in Germany where we have already seen an undershoot.

Euro exchange rates were under pressure after the release of some "ugly" German economic data and economists warn the situation is unlikely to improve soon.

Markets see less than a 50% chance of an interest rate hike from the European Central Bank (ECB) next week, an expectation that has to some extent facilitated recent weakness in the Euro.

Fresh from its post-ECB drubbing, the Euro now faces a string of European inflation releases that could well determine whether another interest rate hike in September is likely.

Germany's economic engine continues to misfire with data out Friday revealing another contraction in the manufacturing sector, setting up the prospect of a rare three-quarter-long recession.

The Euro was softer across the board on the same day it was reported Eurozone inflation data for June undershot analyst expectations and confirmed easing price pressures across the bloc.

EURUSD was under notable pressure ahead of the weekend following the release of economic survey data that one economist described as "dreadful".

The ECB is likely to downplay the significance of the recession.

Euro exchange rates were under pressure after the release of a raft of softer-than-expected data releases from the Eurozone.

The Eurozone's economy continued to expand in May although a sharp deterioration in manufacturing activity and still-elevated price pressures are of concern, say economists.

The Eurozone economy eked out growth in the first quarter of the year but looking at the details reveals Germany is proving a drag while peripheral nations such as Spain and Italy saw robust growth.

GBP/EUR was back under pressure at 1.13 ahead of month-end as the single currency remained favoured ahead of next week's European Central Bank (ECB) meeting.

The message from the April PMIs is clear: the Eurozone economy is rallying back in a strong fashion thanks to a rebound in the bloc's services sector.

European inflation is in retreat and the core inflation rate is on the cusp of a protracted retrenchment that would invite financial markets to position for an eventual series of European Central Bank (ECB) interest rate cuts and which could take the wind from the sails of the Euro, according to BCA Research.

Official figures show the Eurozone's economy flatlined in the final quarter of 2022, but the headline masks a more troubling picture of an economy that is clearly struggling, say economists.

Is stronger-than-expected inflation now a negative for Euro exchange rates?

The Euro was a clear outperformer at the start of the new month as it responded to another leap higher in Germany bond yields as investors react to surprisingly strong inflation readings.