Eurozone GDP

The Euro to Dollar exchange rate was hobbled below 1.10 in early trade after Euro Area growth figures underwhelmed economist expectations just hours out from the release of the latest U.S. inflation figures, which could be key to whether or not the Federal Reserve (Fed) raises its interest rate next week.

European Central Bank President Christine Lagarde warned in the ECB's final press conference of the year that "a relatively short-lived and shallow" technical recession may be seen in the months ahead due to a growing collection of economic ailments stemming from the energy crisis. 

The Euro-to-Dollar rate rose with stocks and other risk currencies Friday having overlooked an underwhelming third-quarter GDP report that showed the Eurozone recovering faster than the neighbouring UK economy last quarter, although some analysts say that upside could be limited in the short-term. 

The Eurozone economy rebounded much more strongly than was anticipated by economists in the third-quarter, Eurostat data revealed on Friday, but with the recovery at risk from renewed 'lockdown' and the EU's coronavirus recovery fund in danger of firing blanks, the data was overlooked by investors. 

The Euro-to-Dollar rate was underperforming Friday, prompting the single currency lower against most major counterparts after a volley of economic data surprised on the downside and as investors appeared to cool it on wagers against the greenback ahead of the weekend. 

The Euro advanced steadily against most rivals Tuesday after official data revealed a faster than anticipated pickup in the Eurozone economy during the first quarter, encouraging speculation suggesting the worst of continental economic slowdown is now in the past. 

The Eurozone economy is still on course to slow even further in 2019, according to economists, although the single currency bloc's health is not nearly as precarious as markets had come to believe in recent months. 

 The Euro drew a supportive bid from the market in mid-morning trading Thursday after official data showed the single currency block dodging a downgrade of earlier estimates of GDP growth and the German economy avoiding recession in the final quarter last year. 

The European economy’s rate of growth is slowing down, and this will probably drive the Eurozone to integrate more rapidly at a political and fiscal level, says Hans Redeker, global head of foreign exchange strategy at Morgan Stanley.

The Euro was resilient Thursday even after official data confirmed the economy has shifted into a lower gear during recent months, although it remains to be seen whether the currency can remain afloat because there could be more bad news to come during the weeks ahead. 

Bank of America Merrill Lynch Global Research have released new analysis that suggests Eurozone GDP could fall sharply in the event of a 'no deal' Brexit transpiring on March 29.

The Euro-to-Dollar rate outlook has dimmed further in recent days as economic and political headwinds are increasingly weighing on the single currency, leading analysts at Westpac to advocate selling the EUR/USD rate short.

GDP growth was 0.6% in the fourth quarter, down from the 0.7% seen during the three months to the end of September, making for annual economic growth of 2.3% according to Eurostat.

With growth at multi-year highs, expectations of a complete end to quantitative easing are mounting, but changes in inflation and wages will be paramount for ECB monetary policy in 2018.

The Eurozone releases their latest set of economic growth data at 10:00 BST on Wednesday, August 16.

Economic data from the Eurozone were weak on Tuesday February 14 with Eurozone GDP grew in Q4 by 0.4% instead of 0.5% estimated by economists.