"The Spanish economy obviously faces many challenges, not least the ongoing process of deleveraging in the public and private sectors, but those headwinds are likely to fade gradually further moving into next year, and we have maintained a positive GDP growth forecast of 0.6% in 2014"
- Analysts at Credit Agricole
The single currency moved higher on Thursday, supported by positive data from Europe's leading economies– Germany and Spain. The EUR/USD currency pair has once again climbed to its one-month high at 1.3617; however, was not able to push any higher.
A report from the Federal Statistical office showed that inflation rate in Germany picked up to 1.3% this month on an annual basis, compared with a 1.2% gain a month earlier, and beating analysts' expectations for no change. On a monthly basis, the pace of growth of CPI stayed at 0.2%, rebounding from a 0.2% drop in October.
Meanwhile, Spain, Europe's fourth largest economy, has finally emerged from it recession, after contracting for nine consecutive quarters. The final report from National Institute of Statistics showed that Spain's gross domestic product posted a modest growth of 0.1%, confirming flash estimates. On a yearly basis, however, GDP contracted 1.1% over the corresponding period. Another welcoming sign for the whole Europe is that Spanish household spending grew for the first time in six quarters, moving higher 0.4%. In addition to that, exports soared 2.2% after a 6.4% increase in the preceding quarter. With investors finally returning to Spain, as Mariano Rajoy sought bailout for the banking sector, the economy is expected to finally start gaining momentum.
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