RESEARCH VIA I FOREX REPORT FOR 14 AUGUST 2014

DAILY CURRENCY UPDATE

Euro little changed as euro zone growth stalls
The euro was little changed near nine month lows against the dollar on Thursday after data showed that economic growth in the euro zone stagnated in the second quarter, indicating that the economic recovery in the region has stalled.

EUR/USD was steady at 1.3365, off session lows of 1.3349.

The pair was likely to find support at around the 1.3300 level and resistance at 1.3385.

The euro showed little reaction after preliminary data showed that euro zone gross domestic product failed to grow in the three months to June. Economists had expected a small expansion of 0.1%.

Germany’s economy shrank by 0.2% in the three month to June, the first drop since 2012 and worse than forecasts for a contraction of 0.1%.

French GDP was flat in the second quarter, the second consecutive quarter of stagnation.

The weak data indicated that the economic recovery in the euro area is losing momentum, adding to pressure on the European Central Bank to do more to bolster growth after it cut rates to record lows in June.

A separate report showed that the annual rate of euro area inflation came in at 0.4% in July, in line with forecasts and unchanged from the preliminary estimate.

But consumer prices declined 0.7% from a month earlier compared to forecasts for a 0.6% drop, after a 0.1% gain in June.

The euro was also steady against the yen and the pound, with EUR/JPY at 136.95 and EUR/GBP close to six-week highs at 0.8012.

Dollar steady, euro near 9-month lows
The dollar was steady against the other major currencies on Thursday, while the euro was close to nine month lows after data showed that economic growth in Germany contracted in the second quarter and growth in France stagnated.

EUR/USD edged down 0.07% to 1.3353, not far from last Wednesday’s nine-month lows of 1.3332.

Germany’s gross domestic product shrank by 0.2% in the three month to June, the first drop since 2012. Economists had forecasts a contraction of 0.1%. First quarter growth was also revised down to 0.7% from 0.8% previously.

Earlier Thursday official data showed that French GDP was flat in the second quarter, the second consecutive quarter of stagnation. Economists had expected an expansion of 0.1%.

The weaker than expected data added to concerns that the economic recovery in the euro area is losing momentum, adding to pressure on the European Central Bank to do more to bolster growth after it cut rates to record lows in June.

The euro zone was to release data on economic growth across the wider currency bloc later in the session, as well as revised data on consumer inflation.

The dollar was flat against the yen and the Swiss franc, with USD/JPY at 102.42 and USD/CHF at 0.9073.

The pound slumped to four month lows, with GBP/USD slipping 0.10% to 1.6671.

Research Via is a leading financial advisory provides free tips on Indian share market like equity tips, stock tips, stock options tips, bullions tips, agro tips, commodity tips, nifty tips, base metals & energy tips, comex tips, international forex tips, domestic forex tips, agri tips, commodity (mcx& ncdex) tips.