Forex Trading News – EUR boosted by strong German and French Q1 GDP data

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EUR rose versus the USD today after strong growth data in Germany and France bolstered expectations that a healthy euro zone economy will keep interest rates in the region higher than their US equivalents. The German economy grew 1.5% in January-March from the previous quarter, while French GDP rose 1.0%. Both readings exceeded forecasts, as did an 0.8% rise in the overall euro zone economy. EUR/USD rose as high as $1.4338 after strong first-quarter GDP data from the euro zone’s biggest economies prompted demand from Asian sovereign names, European real money accounts and leveraged funds. However, economists believe that a weak euro will be required for a solution to the euro zone’s problems, and they do not think this near-term bounce will be sustained.

GBP fell against the EUR today after stronger than expected German growth data and steady buying by leveraged funds lifted the single currency, while the sterling hovered near 3 week lows versus the USD. Traders said the strong German numbers backed expectations that the ECB will raise rates before the BoC in coming months, despite worries about euro zone peripheral debt, as the UK struggles with a patchy recovery.

CAD was slightly softer versus the USD today after volatility fueled by swings in commodity prices. CAD often tracks commodity prices, and typically is closely correlated with US oil because Canada is a net exporter of oil. It has traded in a wide range this week, sliding as low as $0.9444 on the steep slide in oil and silver prices.

The AUD and NZD slipped versus the USD today after upbeat growth data from France and Germany gave the common currency a bit of a lift. EUR 0.1%to A$1.3358, well off this week’s 5-month trough of A$1.3218. But it was still down 0.4% on the week. AUD drifted up 0.1% to $1.0670 and has regained most of the ground lost in the wake of Thursday’s surprisingly weak jobs data, which pushed the currency one cent lower.