Good News in Germany and France Sends the Euro Higher in Forex Trading

Currency trading in the euro zone

The euro is heading higher in forex trading as positive news out of Europe provides a bit of a boost. In Germany and France, the GDP has turned positive. This was a bit of surprise, since things looked so horrible in Quarter 1. But the Quarter 2 numbers are in, and things are looking a bit better. At least for now.

The euro is moving higher in forex trading on the news, and the sterling has even gotten a bit of a boost. However, it is unsure how long this optimism in the euro zone will last. Questions about the sustainability of the GDP rebound are already being raise. In FX360, GFT’s Boris Schlossberg looks at the issues facing the euro zone going forward:

The question going forward however is whether government spending has created enough momentum to generate organic growth in H2 of 2009. For now all signs suggest that at the very least EZ economy has stabilized after the economic freefall of Q1 and growth should be positive for the rest of the year. Nevertheless, the key to sustainability of the recovery will depend on continued demand from China and a revival of domestic consumer spending. On both fronts there are reasons to be concerned as Chinese growth appears to have peaked in Q2 while both German and French retail sales remain moribund as consumers are still wary of economic conditions.

See Also

• Euro in Forex Trading
  Currency trading on the FX market