EUR/JPY strives to break 166.00 decisively on upbeat Eurozone, German GDP data

EUR/JPY sees more upside above 166.00 as upbeat Eurozone Q3 flash GDP has improved the Euro’s outlook.
The German economy returns to growth, surprisingly rose by 0.2% in the third quarter of the year.
Investors await the BoJ meeting to get cues about Yen’s outlook.

The EUR/JPY pair aims for a sustainable break above 166.00 in Wednesday’s European session. The cross strives to gain further as the Euro’s (EUR) outlook has improved after a slew of economic data from the Eurozone and its major regions.

Euro PRICE Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the British Pound.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.16%	0.23%	-0.28%	-0.01%	-0.28%	-0.30%	-0.06%
EUR	0.16%		0.40%	-0.12%	0.15%	-0.13%	-0.14%	0.10%
GBP	-0.23%	-0.40%		-0.52%	-0.24%	-0.52%	-0.54%	-0.28%
JPY	0.28%	0.12%	0.52%		0.27%	-0.01%	-0.03%	0.22%
CAD	0.00%	-0.15%	0.24%	-0.27%		-0.28%	-0.29%	-0.04%
AUD	0.28%	0.13%	0.52%	0.00%	0.28%		-0.01%	0.23%
NZD	0.30%	0.14%	0.54%	0.03%	0.29%	0.00%		0.25%
CHF	0.06%	-0.10%	0.28%	-0.22%	0.04%	-0.23%	-0.25%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

The Eurozone flash Gross Domestic Product (GDP) data shows that the economy expanded by 0.9% year-on-year in the third quarter of the year, faster than estimates of 0.8% and the 0.6% growth in the April-June period. Quarterly GDP growth was 0.4%, double the estimates and the former release of 0.2%.

Meanwhile, the return of the German economy to growth after a contraction in the second quarter has also strengthened the Euro. The German economy unexpectedly grew by 0.2% while economists estimated a steady decline of 0.1%. Also, flash Harmonized Index of Consumer Prices in six German states has come in hotter-than-expected, prompting traders to pare European Central Bank (ECB) dovish bets for the December meeting.

According to market expectations, the probability of the ECB reducing its Deposit Facility Rate by 50 basis points (bps) in December has eased to 22% from 45% after the GDP and inflation data release.

On the Tokyo front, investors await the Bank of Japan’s (BoJ) policy meeting on Thursday. The BoJ is expected to leave interest rates unchanged at 0.25%. Lately, the Japanese Yen (JPY) has remained under pressure due to market expectations of BoJ’s incapability to hike interest rates further as traders doubt economic sustainability after the Liberal Democratic Party (LDP) failed to gain a majority in national elections.

Signs of hawkish interest rate guidance would prompt a strong recovery in the Japanese Yen, while the downside would be limited if the BoJ remains dependent on incoming data.

Economic Indicator

Gross Domestic Product s.a. (YoY)

The Gross Domestic Product (GDP), released by the Eurostat on a quarterly basis, is a measure of the total value of all goods and services produced in the Eurozone during a certain period of time. The GDP and its main aggregates are among the most significant indicators of the state of any economy. The YoY reading compares economic activity in the reference quarter compared with the same quarter a year earlier. Generally speaking, a rise in this indicator is bullish for the Euro (EUR), while a low reading is seen as bearish.

Last release: Wed Oct 30, 2024 10:00 (Prel)

Frequency: Quarterly

Actual: 0.9%

Consensus: 0.8%

Previous: 0.6%

Source: Eurostat

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