The big news yesterday was that the eurozone economic recovery continues, as annual GDP growth came in at 2.5%. In addition, monthly GDP was 0.6% in yet more signs that the eurozone is ahead of the UK in terms of growth. This was further emphasised by Spain’s GDP on Monday and the French GDP yesterday which grew by 0.5% for the third quarter of 2017.
This helped consolidate the euro’s position against the US dollar, but did nothing to stop it sliding further against the pound as the UK interest rate decisions continues to exert influence on the markets. It still remains to be seen whether the pound will spike on Thursday, especially as the markets have priced in a rate hike, but the recent rallying of the pound is a little surprising so anything could happen.
There are no major data releases today, as traders will be focused on the Fed meeting later today. However, tomorrow we will see the unemployment rate in Germany and, as the eurozone’s largest economy, it will be interesting to see what the reading is. However, as that comes on the same day as the aforementioned BoE meeting, it will probably have little bearing on the euro’s performance – especially if UK rates are increased.