French Economy Stalls in Q1 2012 – EUR/USD Remains Low


The French economy did not grow  in Q1. This is exactly as expected. Year-over-year growth is 0.3%.

EUR/USD isn’t excited. It remains just under 1.2830, in the lower end of the current range.

France surprised and grew in Q4 2011 by 0.2%. So in any case, Europe’s second largest economy wouldn’t have entered an official recession. Two consecutive quarters of negative growth (or contraction) define a recession.

EUR/USD was trading at the low levels of 1.2830, above minor support at 1.2818 and well below 1.2873 it lost yesterday. Further support is at 1.2770. See more analysis in the EUR/USD forecast.

At the same time, France also released its Consumer Price Index for April, which showed that prices rose by only 0.1%, lower than +0.3% that was expected.

Busy morning

This is the first release in a busy morning for Europe. Germany releases its GDP results at 6:00 GMT and is expected to grow by 0.1%, after disappointing and contracting in Q4 2011. Another quarter of contraction will be shocking, as Germany is expected to lead the continent.

Italy will likely see a third quarter of contraction when it publishes results at 8:00 GMT. The figure for the whole euro-area is due at 9:00 GMT and is expected to officially put the euro-zone in recession with a slump of 0.2%. Spain already reported its negative growth.

The focus remains on Greece: leaders will try to form a government once again today, although the chances are slim. Greece is running out of money as many prefer deferring tax payments.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.


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