"Is the German economy finally picking up? Recent monthly data had painted a rather confusing picture with strong soft data but disappointing hard data. Today's growth outcome is actually better than monthly hard data had suggested."
- ING's Carsten Brzeski
The single currency was just slightly bullish on Friday, with the EUR/USD currency pair moving to 1.3714; however, the pair was not able to move above the strong psychological level of 1.37. Despite such a weak performance, Friday's bunch of fundamental data eased some of the pressure on the central bank, as economic growth in the 18-nation bloc picked up in the fourth quarter of 2013.
Official report from the Eurostat showed the Eurozone economy posted a 0.3% seasonally adjusted growth in the final three months of the last year, accelerating from 0.1% expansion a quarter earlier and outpacing analysts' projections for a 0.2% growth. On a annual basis, the economy demonstrated even more remarkable performance recovering from a 0.3% contraction to a solid growth of 0.5%. The report usually has a moderate market impact, as Germany, France and Italy reports on their GDP earlier, and they accounts for the majority of overall economic activity.
During the last policy meeting the ECB decided to stay pat on its monetary policy, leaving interest, marginal lending facility rate and deposit rates unchanged at 0.25%, 0.75% and 0%, respectively. Mario Draghi, however, signalled his readiness to act in March in case of weak data, but Friday's stronger-than-expected GDP data is diminishing concerns of another market intervention.
© Dukascopy Bank SA