The Eurozone economy contracts slightly. However, the euro rises. Kit Juckes, Chief Currency Strategist at Societe Generaleanalyzes the prospects for the euro.
Even the UK is doing a little better than the Eurozone and Japan is catching up
Today’s release of Eurozone GDP data, and the markets’ (lack of) reaction, may tell us something about how difficult it is for the Euro to fall that much from now on.
Eurozone GDP fell 0.1% in the 3rd quarter, leaving it 0.1% above the 3rd quarter of 2022. The increase in US GDP in the third quarter was 1.2% quarter-on-quarter and 2.9% % year-on-year. Even the UK, for now, is doing a little better than the Eurozone and Japan is catching up. However, the fact that this news has not hurt the Euro reminds us that the lack of growth is already priced in. However, this does not mean that the Euro is safe.
The risk is that we continue to see (as has been the case in recent weeks) ECB cut expectations rise, while Fed expectations remain on the “high for longer” mantra. That may still bring EUR/USD closer to parity.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
