The French economy exited its recession and with a bang. The economy grew by a strong 0.5% in the second quarter, according to the initial release. It was expected to grow by 0.1%, after two quarters of squeezing by 0.2% and suffering an official recession. France is Europe’s second largest economy.
EUR/USD traded quietly around 1.3255 prior to the publication. The pair moved higher with a small gap and jumped above 1.3260. Update: It is now moving above 1.3270.
The National Institute of Statistics and Economic Studies reported that this is the largest increase since Q1 2011. The annual growth rate is 0.1%. Households’ consumption rose by 0.4% while general government’s consumption expenditure rose by 0.5%. Exports jumped by 2% and imports by 1.9%. All in all, France enjoyed a significant rise in economic activity.
From France, the next event is the preliminary Non-Farm Payrolls change. For the euro, the German GDP will be released soon, and it carries a lot of weight.
Update: Also Germany exceeded expectations and grew by 0.7%.Get the 5 most predictable currency pairs