Euro weathered the storm of negative data

Euro has shown resilience despite weaker-than-expected German economic data released on Tuesday. This data highlighted a deterioration in consumer confidence within the Eurozone.

The German GfK consumer confidence index fell to -22.0 in September, compared to -18.6 in August, reflecting growing pessimism among European consumers about the economic outlook.

Additionally, Germany’s gross domestic product contracted by 0.1% in the second quarter of 2024, confirming earlier preliminary estimates. This follows a 0.2% growth in the first quarter. On an annual basis, Germany’s GDP was unchanged, showing a 0.1% contraction compared to the same period last year.

Despite this negative economic news, the euro/dollar pair rose to 1.1183, up from the previous day’s close of 1.1160. The pair traded in a range between 1.1150 and 1.1190.

The euro’s strength was also supported by a decline in the US dollar following the Federal Reserve’s meeting and Chairman Jerome Powell’s remarks at the Jackson Hole symposium. Powell’s comments hinted at a potential interest rate cut in September, which weakened the dollar and boosted the euro.