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The Eurozone is set to announce its GDP growth and inflation data this week.
The Eurozone economy grew 4% year-over-year in Q2, compared to 5.4% growth in Q1. But the reading still came in above market expectations of 3.4%. The region’s economy expanded 0.7% quarter-on-quarter during the three months to June, notching the strongest performance in three quarters, with Spain, Italy and France expanding at a strong pace.
The annual inflation rate in the Eurozone climbed to a record high of 8.9% in July, from 8.6% in June, according to preliminary estimates. This reading also came in above the consensus estimate of 8.6%.
So, what are the expectations from these reports?
There are rising concerns regarding the ongoing energy crisis and the continuing Russia-Ukraine conflict, with Russia warning further natural gas cuts, which could threaten the winter season outlook. These issues are expected to put pressure on the inflation levels and economic growth in the coming months.
The European Commission has lowered its economic growth projections and increased its estimates for inflation. The EU body now sees 2.6% growth for 2022, lower than the 2.7% growth projected in May. The growth prediction for 2023 now stands at 1.4%, down from the 2.3% projected earlier.
The EC increased its forecasts for Eurozone inflation, with expectations of the inflation level peaking at 7.6% this year, before easing to 4.0% in 2023.
How to trade the EUR/USD pair following these major reports?
The EURUSD pair hit parity for the first time in 20 years in July, amid increasing recession concerns. However, strong data from the Eurozone could provide support to the European currency in the coming months.
Get ready for the release of these major economic reports from the Eurozone, which are expected to present exciting trading opportunities in the coming week. Power your trading decisions with cutting-edge trading tools and analytics from Vantage.
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