Despite the favorable data on the growth of the eurozone economy in the second quarter of this year, demand for the euro remained fairly moderate on Tuesday, August 1.
According to the statistics agency, the euro area's GDP grew by 0.6% in the second quarter of 2017 compared to the previous quarter and by 2.1% compared with the same period of the previous year. In the first quarter, GDP growth was at 0.5%. Such upbeat data allows us to start talking again about the possible partial unwinding of the European Central Bank of its stimulus measures by this fall.
Data on the German labor market also turned out to be quite good, as the number for unemployment benefits in July fell more than expected. According to the report, the jobless rate in July this year remained at around 5.7%, and the number of unemployed fell by 9,000. Economists had forecast a drop of 5,500.
Demand for the US dollar returned after it became known that consumer spending in the US increased, which maintains a positive momentum in the economy.
According to the data, personal consumption in June this year rose by 0.1% compared with the previous month, while economists expected that consumer spending will remain unchanged. Personal incomes also remained unchanged, while economists had expected a growth of 0.4%.
Traders were slightly pleased with the data from the Institute for Supply Management, as they pointed to a decline in the index of the manufacturing sector. According to the report, the ISM index for the manufacturing sector in July this year dropped to a level of 56.3 points from 57.8 points in June. Economists predicted that in July the index will be 56.2 points.
On the contrary, the index of supply managers from Markit for the manufacturing sector has increased, as it strengthened in July 2017 to 53.3 points against 52 points in June.
The British pound today has traded in a narrow range, making a modest attempt to grow against the US dollar following the release of the data on growth in activity in the manufacturing sector. According to the report, the index of supply managers for the UK manufacturing sector in July this year has increased to 55.1 points against 54.2 points in June. Economists forecasted the index to be at 54.9 points.
