German preliminary GDP growth of 0.2% in Q2 exceeded expectations, lifting the Euro briefly before broader risk aversion weighed on the currency.
The Euro pared some losses against the US Dollar after Germany’s preliminary GDP data showed a 0.2% quarterly expansion in Q2, beating the 0.1% forecast. Year-on-year growth accelerated to 0.9%, up from 0.4% in Q1 and above the 0.6% consensus. The EUR/USD pair traded at 1.1450, off its intraday high of 1.1475.
Market expectations had centered on a 0.1% quarterly gain, following a 0.3% rise in Q1. The stronger-than-expected print provided temporary support for the Euro, though broader risk sentiment remained subdued. Later today, Eurozone preliminary GDP data is expected to show a 0.2% rebound in Q2, reversing a 0.2% contraction in Q1.
Geopolitical tensions in the Middle East, including renewed US-Iran hostilities, weighed on risk appetite, limiting the Euro’s gains. Higher oil prices and a firmer Dollar further capped the currency’s recovery.