Eurozone GDP growth outpaced US annualized growth in Q2, lifting EUR/USD above 1.15 for the first time since mid-June.
EUR/USD climbed above 1.15 for the first time since June 17, driven by stronger-than-expected Eurozone GDP growth. The Eurozone economy expanded 0.4% quarter-on-quarter in Q2, translating to an annualized 1.6% gain, surpassing US growth of 1.5% in the same period.
US GDP growth fell short of consensus expectations, while Eurozone inflation data from Spain, Belgium, and Germany showed slight increases. This dynamic may ease the European Central Bank’s path to a September rate hike, analysts noted.
A low US savings rate could weigh on future US growth, though some of the recent EUR/USD move may reverse if Bank of Japan-related flows diminish.