Strong eurozone data fired the euro upwards

Strong eurozone data fired the euro upwards


During the yesterday’s session, the euro appreciated after Germany’s gross domestic product data exceeded the economists’ preliminary forecasts. For the third quarter of the year, the largest European economy managed to achieve growth of 0.8% on preliminary expectations for an increase of 0.6%. Italy’s gross domestic product data also surprised market participants after quarterly GDP accelerated to 0.5 per cent against projections of 0.4 per cent.

Strong economic news has boosted investors’ enthusiasm about economic developments in the eurozone, with the single currency rising 1.1% to 1.1794 dollars. This is the best daily increase for the euro since June 27. “The main factor responsible for the strong performance of the European currency was solid data on German GDP”, commented Eric Viloria, a currency strategist at Wells Fargo. Depending on the British pound, the European currency gained 0.74%.

Green money ended yesterday on a negative territory. The dollar index, measuring the change in the currency against 6 of the major currencies, declined by 0.7 per cent to 93.828 points. At the same time, the British pound kept its volatile performance from the last few sessions. Inflation data in the UK turned out to be slightly weaker than expected.

This raises doubts about future interest rate rises on the part of the British Central Bank. The New Zealand dollar, which is sensitive to the economic data coming from China, presented itself in a mediocre fashion, ending the day at levels close to $0.6875. Chinese retail sales as well as industrial production did not meet the expectations of analysts, and this put pressure on the performance of the New Zealand currency.

Gold benefits from the weakness of the dollar, ending the day on a positive territory. The spot metal price rose 0.34% to $1 281.94 per troy ounce while futures with a delivery term in December rose 0.3% to $1 282.90. “Overall stock markets are showing signs of slowdown, which is why there is diversification of investment portfolios towards safe havens such as gold,” said Dan Hussey, market strategist at RJO Futures.

According to him, it is not possible in the short term that the price of gold reaches $1,350. Other precious metals had a mixed performance. Silver futures rose 0.1 percent to $17.05 per troy ounce. Platinum, however, realizes a downward depreciation of half a percent to $927.

The gloomy forecasts of global oil demand growth, as well as fears about rising shale production in the United States, have led to a sharp decline in oil prices. On Monday, US officials commented that in December shale oil yields will reach 80,000 barrels per day. In this way shale production in the US will increase for the twelfth consecutive month. Black Gold closed down by 2% to $55.50 a barrel.

The Brent variety declined by nearly 1.7%, or 1.04 dollars, to 62.12 dollars. Market observers commented that depreciation has forced some short-term traders to close their positions. The Brent reported a serious decline, especially after the 14-year moving average, which was the first time in 3 weeks.