- BNP Paribas
On the back of stronger than expected growth in the world's largest economy, the most traded currency pair dipped below 1.34–mark. While figures can look unrealistic, unconvincing data from Europe also supports the case for the pair's depreciation. Inflation has been the key concern for the ECB in the recent months and it seems that even despite a massive stimulus package, little has changed. On Wednesday Destatis reported the cost of living in Europe's largest economy rose 0.3% on a monthly basis in July, while annual growth stood at 0.8%, easing back from June's 1.0% and meeting the consensus forecast.
That was not the only report from the 18-nation bloc continues on Wednesday, as consumer morale dipped to a three-month low in July, while growth in Europe's fourth largest economy, Spain, accelerated more than originally was expected. A report from the European Commission showed a gauge of consumer confidence reached –8.4 in July, falling 0.9 points, meeting flash estimates published a week earlier. Despite disappointing figure, the index is still above the long-term average of –12.6 points. In the meantime, Spain is sending optimistic signs, as growth of 0.6% outstripped central bank's forecasts, putting annual growth at 1.2%. This makes Spain one of the fastest growing European economies. Inflation, however, is still sluggish, with consumer prices falling 0.9%, the lowest rate for the last five years.
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