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Forex News: Euro Falls As German Economy Shrinks

Euro Falls As German Economy Shrinks

04/30/2021 - 06:53:00 (RTTNews)

(RTTNews) - The euro weakened against its major counterparts in the European session on Friday, as German economy contracted more than expected in the first quarter due to the coronavirus pandemic.

Data from Destatis showed that gross domestic product fell 1.7 percent sequentially, in contrast to the 0.5 percent growth seen in the fourth quarter of 2020. This was bigger than the economists' forecast of -1.5 percent.

GDP, on an unadjusted basis, declined at a faster pace of 3.3 percent annually in the first quarter after easing 2.3 percent in the previous quarter. Economists had forecast an annual fall of 3.6 percent.

Compared with the fourth quarter of 2019, GDP was 4.9 percent lower in the first quarter of 2021.

The currency was further pressured by a rise in the dollar, as strong economic data intensified hopes for a faster economic recovery.

The euro slipped to a 2-day low of 1.2091 against the greenback, while touching 1.0987 against the franc, which was its lowest level since April 13. On the downside, 1.18 and 1.07 are likely seen its next support levels against the greenback and the franc, respectively.

The euro edged down to 131.62 against the yen from Thursday's close of 132.02. The euro is seen facing support around the 129.00 mark.

Data from the Ministry of Economy, Trade and Industry showed that Japan industrial output climbed a seasonally adjusted 2.2 percent on month in March.

That exceeded expectations for a decline of 2.0 percent following the 1.3 percent decline in February.

The euro fell to its weakest level since April 6 against the loonie, at 1.4839. The euro may target support around the 1.44 area.

The European currency dropped to 1.5561 against the aussie, off its prior high of 1.5608. Against the kiwi, the euro was trading lower at 1.6712. The next possible support for the euro is seen around 1.49 against the aussie and 1.62 against the kiwi.

The euro pulled back to 0.8684 against the pound, after reaching a 2-day high of 0.8703 at 3:15 am ET. If the euro extends decline, 0.84 is possibly seen as its next support level.

Data from the Nationwide Building Society showed showed that UK house prices increased at the fastest pace since 2004 after the extension of the stamp duty holiday.

House prices grew 2.1 percent month-on-month in April, the biggest monthly rise since February 2004. Economists had forecast an increase of 0.5 percent after posting a 0.3 percent drop in March.

Looking ahead, Canada GDP data for February, U.S. personal income and spending data for March and University of Michigan's final consumer sentiment index for April will be featured in the New York session.

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