Euro Rises On Strong Eurozone Economic Data

(RTTNews) - The euro strengthened against other major currencies in the Asian session on Tuesday, after data showed that the euro area economy expanded in the first quarter after two consecutive declines and also the consumer prices registered a steady growth in April.

A preliminary flash estimate from Eurostat showed that the Eurozone Gross domestic product grew by more-than-expected 0.3 percent on quarter following a 0.1 percent fall each in the fourth and third quarters of 2023.

Thus, the economy recovered from a recession. GDP was expected to rise 0.1 percent in the first quarter.

On a yearly basis, GDP growth accelerated to 0.4 percent from 0.1 percent in the previous quarter. This was also better than forecast of 0.2 percent.

The Eurozone harmonized index of consumer prices grew 2.4 percent on a yearly basis, the same rate as seen in March and matched economists' expectations.

Month-on-month, the HICP grew 0.6 percent and core consumer prices rose 0.7 percent in April.

Investors looked forward to the Federal Reserve providing an update on when interest rates might be cut.

The European currency held steady against its major rivals in the Asian trading today.

In the European trading now, the euro rose to a 4-day high of 1.0727 against the U.S. dollar, from an early 4-day low of 1.0689. The euro may test resistance near the 1.09 region.

Against the pound, the Swiss franc and the yen, the euro advanced to 0.8553, 0.9779 and 168.37 from early lows of 0.8530, 0.9754 and 167.23, respectively. If the euro extends its uptrend, it is likely to find resistance around 0.86 against the pound, 0.98 against the franc and 171.00 against the yen.

Against the Australia and the New Zealand dollars, the euro climbed to 4-day highs of 1.6431 and 1.8048 from early lows of 1.6324 and 1.7938, respectively. The next possible upside target for the euro is seen around 1.66 against the aussie and 1.81 against the kiwi.

The euro advanced to a 5-day high of 1.4688 against the Canadian dollar, from an early an early low of 1.4636. The euro is likely to find resistance around the 1.47 region.

Looking ahead, Canada GDP data for April, U.S. employment cost index for the first quarter, Redbook report, house price index for February, U.S. Chicago PMI for April, U.S. CB consumer confidence for April and U.S. Dallas Fed services index for April are slated for release in the New York session.