The euro rose against the US dollar after the release of a report from the European Commission, in which the forecasts for GDP growth and lower unemployment were revised in a positive way.
In the first half of the day, recent data indicated growth in Germany's foreign trade balance, even despite the decline in exports, as imports decreased even more compared to the previous month.
According to the report of the National Bureau of Statistics, Germany's exports in September 2017 declined by 0.4% compared to August, while imports fell 1.0%.
Germany's foreign trade surplus with revision amounted to 21.8 billion euros against 21.3 billion dollars in the previous month.
On Thursday, the Bank of France released a report, which indicated that the eurozone's second largest economy might grow by 0.5% at the end of this year. Good support by the end of the year can be provided by France's manufacturing sector and the services sector.
As I mentioned above, the report of the European Commission was published on Thursday, according to which the eurozone GDP is projected to grow by 2.2% in 2017 against the previous forecast of 1.7%. In 2018, the economy could grow by 2.1% against the previous forecast of 1.8%, and in 2019 predicts the growth of the eurozone's GDP at 1.9%.
There are also good moments that can be found in the labor market. Economists expect unemployment in the eurozone in 2017 to drop to the level of 9.1% against the previous forecast of 9.4%. In 2018, the same indicator should decrease to 8.5% against the previous forecast of 8.9%, and in 2019 will drop to the level of 7.9%.
According to the European Commission, at present, the eurozone is on track for its fastest economic growth in a decade, while in the labor market there is still a weak wage growth and a significant amount of unused resources.
However, everything is not so positive when it comes to inflation. The report was revised for the worse. The European Commission forecasts inflation in the euro area at 1.5% in 2017 against the previous forecast of 1.6%. In 2018, inflation is expected at 1.4% against the previous forecast of 1.3%, and in 2019 the level is set at 1.6%.
The sharp growth in the euro in the first half of this year forced economists to revise their forecasts, and the curtailment of the mitigation program and incentive measures could further hurt the inflationary picture, which the European Central Bank pays close attention to.
