EUR/USD down flowing euro zone data

The euro gained ground on the dollar on Tuesday on the back of data revealing that economic sentiment in Germany had lowered and that the economy in the euro zone had shrunk.

Eurostat revealed that the region’s gross domestic product had shrunk by 0.2 per cent in the second quarter, bringing the rate of contraction seen in the last 12 months to 0.4 per cent. Meanwhile, separate data showed that the euro zone’s industrial production was 0.6 per cent down in June, marginally better that the predicted fall of 0.7 per cent.

The EUR/USD climbed back from 1.2386 to reach 1.2348, up by 0.13 per cent, in early afternoon European trade on Tuesday. Support for the pair was likely to be found at Monday’s low of 1.2260, while resistance should be seen around the 8 August high of 1.2401.

The common currency rose earlier after data from European powerhouses France and Germany was better than expected. The economy in France remained flat in the second quarter, an improvement on the 0.1 per cent contraction which had been forecast, while Germany saw its economy grow by 0.3 per cent in the same three months, surpassing expectations of a 0.2 per cent expansion.