Euro Advances against Dollar despite Weak German GDP

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On Thursday, the euro advanced against the US dollar despite Germany’s weak gross domestic product (GDP). 

As of writing, the euro to dollar exchange rate increased 0.24% to 1.12, edging up from its decline of 0.44% yesterday. 

On the economic data front, German GDP weakened 1.70% from the previous quarter of 2.00%. In addition, it fell from the market estimate of 1.80%.

Then, the indicator also dropped to 2.50% from the 10.40% last year.

At the same time, Germany’s GfK consumer climate, a measure of purchasers’ confidence, dropped to 1.60 from the prior number of 1.00. 

Eventually, it came in lower than the analysts’ forecast of -0.50. 

On Wednesday, the domestic business climate in November slumped to 96.50 from 97.70, missing the expected data of 96.60. 

Nevertheless, these negative figures unmoved the euro against the greenback. 

In a news conference, European Central Bank President Christine Lagarde mentioned that the majority of the officials believed that inflationary forces are transitory.

Also, investors looked forward to her speech today, at which board members Frank Elderson and Edouard Fernandez-Bollo will engage.

Accordingly, the tighter restrictions against the soaring COVID cases outweighed the potential shift in the ECB stance, keeping the euro under pressure.

This fueled the rising concerns that have affected regional optimism and pulled on the single currency into month-end. 

Moreover, the euro to Swiss franc exchange rate also edged up 0.10% to 1.05.

Similarly, the euro to Pound sterling exchange rate rose 0.25% to 0.84. 

It is the same with the euro to Japanese yen exchange rate as it elevated 0.14% to 129.41.

Dollar Skids as Euro Gains

Meanwhile, the US dollar index, which trails the greenback against a basket of its six rival currencies, curtailed 0.19% to 96.69. 

In the third quarter, American GDP decreased to 2.10% from the last 6.70%, making it less than the projected 2.20%.

Consequently, the initial jobless claims fell to 199,000 from 270,000, providing a little support to USD. 

Correspondingly, the USD/JPY pair shed 0.06% to 115.33 as the USD/CAD pair lost 0.01% to 1.27. 

Also, the USD/CHF pair tumbled 0.13% to 0.93 as the AUD/USD reduced 0.14% to 0.72. 

Unlike the euro, the GBP/USD pair decreased 0.01% to 1.33 for the first time in 11 months.

In line with this, market participants remained focused on whether or not the Bank of England will hike rates on December 16.

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