European Data Surprises, Euro Advances
The euro strengthened against the US dollar in trading on Thursday (July 30th), with EUR/USD hovering around 1.1460. The strengthening was supported by better-than-expected European economic growth and a slowdown in the United States.
The Eurozone economy grew 0.4% in the second quarter, beating the 0.2% forecast and reversing from a 0.2% contraction in the previous quarter. Spain recorded the highest growth of 0.7%, while Germany, France, and Italy each grew 0.2%.
In contrast, the US economy grew only 1.5% annually in the second quarter, lower than the 2.1% forecast. Core PCE inflation also slowed to 0.1% monthly and 3.3% annually, indicating price pressures are easing.
Consequently, weaker US data could ease pressure on the Fed to raise interest rates and keep the dollar under pressure. EUR/USD has the potential to continue strengthening as long as European data remains positive, although its future direction still depends on German inflation and developments in central bank policy. (arl)
Source: Newsmaker.id
