The euro fell against the greenback yesterday following the release of better-than-anticipated US third-quarter GDP data. The German Gfk consumer sentiment index also projected an improvement in November but remained in the negative (pessimism) territory. Overall, the EUR/USD pair declined from a high of 1.0080 to a low of 0.9950.
The German GfK consumer sentiment is expected to improve slightly in November, with the corresponding index inching up to -41.90, from -42.80 in October, and in line with economists’ expectations. The projected index value represents the first likely improvement in consumer sentiment after four successive months of historically low readings. However, the negative reading indicates a pessimistic mood.
Income expectations improved to -60.50 in October, from -67.70 in September. Likewise, the inclination to purchase grew by -17.50 in October, from -19.50 in the prior month. However, business cycle expectations declined to -22.20, from -21.90.
According to the Spanish National Statistics Institute (Instituto Nacional de Estadística), the country’s unemployment rate inched up to 12.67% in the September 2022 quarter, from 12.48% in the prior quarter, and disappointed economists who were expecting a slight dip in the jobless rate to 12.40%.
The number of employed people rose by 77,700 in the September 2022 quarter. The aggregate number of employed people stood at 20,545,700.
Employment has increased by 514,700 (or 2.57%) in the past 12 months. While the public sector added 52,300 jobs in the September quarter, the private sector recorded an increase of 25,400 jobs. The services sector posted an employment increase of 114,300. Likewise, the industry reported an addition of 33,100 jobs in the third quarter. However, agriculture lost 60,300 jobs. Also, construction lost 9,400 jobs. The count of jobless people grew by 60,800 (or 2.08%) in the September quarter. The aggregate number of unemployed people stood at 2,980,200.
The advanced data published by the US Bureau of Economic Analysis indicated that the country’s GDP rose (annual rate) by 2.60% q-o-q in the September quarter, following a contraction of 0.60% in the June quarter and surpassed forecasts of 2.30% growth. The increase mainly mirrored a slight decline in private inventory investment, a rise in nonresidential fixed investment, a rebound in federal government spending, and a slowdown in consumer spending.
Furthermore, the current-dollar GDP grew by 6.70% (annual rate), or $414.80 billion, in the September 2022 quarter to $25.66 trillion. In the prior quarter, GDP rose by 8.50%, or $508 billion.
The Bureau of Economic Analysis also stated that the country’s price index for gross domestic purchases increased by 4.60% in 3Q 2022, compared with a rise of 8.50% in 2Q 2022.
Also, current-dollar personal income grew by $291.20 billion in Q3 2022, compared with a rise of $305.70 billion in Q2 2022. Likewise, disposable personal income rose by $268.30 billion (or 6%) in the September 2022 quarter, compared with an increase of $253.30 billion (or 5.70%) in the June 2022 quarter. Personal savings fell slightly to $626.10 billion, from $629 billion.
According to the US Census Bureau, the country’s durable goods orders rose by 0.40% m-o-m in September, following a 0.20% growth in the prior month, but missed forecasts of a 0.60% increase.
Excluding volatile goods such as transportation equipment, durable goods orders declined by 0.50%m-o-m in September, following a rise of 0.30% in the prior month, but missing forecasts of 0.20% growth.
According to the US Department of Labor, the country’s first-time unemployment claims increased to 217,000 in the week ended October 22, from 214,000 in the prior week. Economists had anticipated an increase in jobless claims to 219,000. The four-week moving average stood at 219,000, up from the earlier week’s average of 212,250.
The upbeat US GDP data is expected to keep the EUR/USD pair range-bound with a slight bearish bias in the near term.
The historical price chart indicates that the EUR/USD pair is declining after facing resistance at 1.0085. The next support is anticipated at only 0.9810. Additionally, the stochastic indicator is in the bearish zone. Therefore, we anticipate the EUR/USD pair to remain in a downtrend in the days ahead.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
