The euro may not have gained much against the dollar, but it did a hell of a job against the Swiss franc! It simply shrugged off last Friday’s weak euro zone data and pushed EUR/CHF up 221 pips to close above 1.1000. Now THAT’S gangsta!
It looked as though the euro was about to have another bad day as French preliminary GDP was a little bit disappointing. Instead of recording 0.3%, GDP growth came in flat in Q2 2011. Apparently, a slump in consumer spending and dwindling exports had the French economy on the brink of contracting!
Surprisingly enough, despite the fact that the economy’s performance was sub-par last quarter, the French labor market managed to chalk up awesome gains. French preliminary non-farm payrolls posted a 0.4% rise in Q2, twice what was expected!
Unfortunately, the joy from seeing that report was short-lived as euro-area industrial production data printed sad results later in the day. According to June data, production fell 0.7% month-on-month versus the forecasted 0.1% increase as 15 of the member states posted declines, 5 posted increases, and 1 remained stable. No doubt, this is one aspect of the economy that the euro-area will need to improve on if it wants to hasten its recovery.
Today’s a good day to be a banker in Italy and France because both economy giants are celebrating bank holidays! However, this means that we’ll have to wait until tomorrow for a taste of euro zone data. But don’t worry, it’ll surely be a treat because we’ve got German GDP on tap at 6:00 am GMT. Don’t miss it, kids! It could be a big market-mover!