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The French economy squeezed by 0.2% in Q1 2013, according  according to the initial, Flash, estimate, after contracting by 0.2% in Q4 2012, making it two consecutive quarters of economic contraction – a recession. This is a bit worse than a drop of 0.1% that was expected. However, the drop in Q4 2012 was revised to the upside: from 0.3% previously reported to 0.2% now. These rates of contraction are not terrible, but the economy is still shrinking steadily.

EUR/USD is now losing a few pips on this marginal disappointment. It was trading steadily at around 1.2935, off from the lows of 1.2915 seen beforehand, but below the area of 1.30 that characterized its trading beforehand.

Update: Germany grows by only 0.1% and the euro falls.

France is the second largest economy in the euro-zone, and also in the whole EU.

Germany, the euro-zone’s largest economy, will publish its GDP figures at 6:00 GMT. Germany is expected to return to growth after a big contraction of 0.3% in Q4 2012.  See how to trade the German GDP with EUR/USD.

Here is a live 30 minute chart of EUR/USD, showing the impact of the release:  [do action=”tradingviews” pair=”EURUSD” interval=”30″/]