The Euro edged away from the near yearly low it slumped to on Thursday after data showed that the Eurozone economy expanded more than expected in the final quarter of 2013.
According to Eurostat, the region’s economy expanded by 0.3% in the final part of last year, beating expectations. The report eased concerns that the region’s economic recovery is stalling and was a better figure than the 0.1% expansion recorded in the previous quarter.
On a member state level, the French and German economies expanded at similar paces, narrowing the divergent gap between the regions two leading economies. Investment increased in both nations. The French economy expanded by 0.3% beating forecasts for a figure of 0.2%. Germany’s economy expanded by 0.4% due to increasing exports.
The positive data is something of a surprise as recent data releases from several Eurozone nation’s has come in weaker than expected. Inflation remains low and unemployment remains at record highs suggesting that the ‘recovery’ has to make any significant impact on people’s lives. Unemployment hit a new record in Greece just this week. Greece’s GDP contracted by -2.6%.
The GDP data eases some of the pressure on European Central Bank Governor Mario Draghi to introduce further stimulus measures.
Investors also widely saw the resignation of embattled Italian Prime Minister Enrico Letta as a positive. The PM was ousted from power by Matteo Renzi.
“The appointment of Renzi is seen as something positive. He is a new politician who can take decisive action. This is not political uncertainty. In fact, the political situation in Italy is now clearer,” said a strategist at BNP Paribas.
Sterling remained supported after the Bank of England raised its growth forecasts for the UK economy earlier in the week and as a report showed that construction output continued to be strong.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,Australian Dollar,1.5170 ,
Euro,,Canadian Dollar,1.4996 ,