The Euro fell against the Pound and other major peers on Thursday after GDP data showed that the Eurozone economy grew less than forecast and Italy’s economy unexpectedly shrank.
The Euro was already under pressure following the release of French and German GDP data earlier in the session.
German GDP increased by 0.8% in the first quarter of the year beating expectations for a figure of 0.7%. The report out of France showed that the regions second largest economy stagnated in the first quarter and highlights just how weak the much hailed ‘recovery’ actually is.
Dismal GDP data out of the Netherlands showed that the nation’s economy contracted by a whopping 1.4%, well below forecasts for a figure of 0.0%. The nation’s economy has now contracted by 0.5% since last year.
Italy too saw its economy contract. GDP fell by 0.1% in the first quarter dashing hopes for a rise of 0.2%. The fall will set off alarm bells across the region as Italy only just recently managed to claw its way out of recession three months ago.
Finland slipped back into recession after its economy contracted by 0.4%. The decline added to the 0.3% contraction seen in the fourth quarter of the year.
Portugal too saw its economy contract by 0.7% dashing hopes that the nation was on course to see further expansion.
The dreadful data now puts the much vaunted economic recovery praised by economists and the EU into question.
Inflation data also released today came in as expected. The regions monthly inflation rate came in at 0.2% and yearly Core inflation came in at 1.0%.
The lack of an upward movement in inflation and the terrible GDP data out of many Eurozone nations has caused investors to hike their bets that the European Central Bank will introduce further monetary easing measures at next month’s policy meeting.
Euro Exchange Rate News:
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