Resilient Eurozone growth contrasts with rising risks from labor market loosening and geopolitical tensions, pressuring the EUR.
Eurozone Q2 GDP grew 0.4% quarter-on-quarter, exceeding the 0.2% median forecast, despite energy price spikes and supply disruptions linked to the Strait of Hormuz. The data underscores resilience in the bloc’s economy, though risks persist.
PMI figures also surprised to the upside, but downside pressures loom. Germany’s unemployment rate rose to 6.4% in July, pushing total unemployed above 3 million, while real employee compensation growth slowed sharply. Analysts warn consumer spending may stagnate for the remainder of the year.
Further ECB tightening, US-Iran tensions, and competition from China add to growth concerns, potentially capping EUR strength despite recent positive data.