The Euro firmed against the weakened Pound and edged higher against the US Dollar as GDP data from Spain offered the single currency some support ahead of next week’s European Central Bank policy meeting.
The GDP out of Spain showed that the nation’s economy expanded at its fastest pace since 2008 in the first quarter of 2014 and showed that domestic demand is recovering as the nation emerges from a long running recession.
According to the National Statistics Institute, GDP expanded by 0.4% in the first quarter compared to the final quarter of last year. The quarterly rise was the biggest increase since the beginning of Spain’s worst downturn in modern times.
On an annual basis the Spanish economy expanded by 0.5%, better than the 0.2% contraction seen in the previous quarter. The Institutes year-on-year flash estimate was 0.6%.
Data released yesterday also added to the sense of growing optimism surrounding the Spanish economy. Retail sales rose in April halting a trend of declines seen in recent years.
“The Spanish economy has pulled out of its nosedive and is heading in the right direction,” said an analyst. Earlier in the week the International Monetary expressed a similar opinion when it said that “Spain has turned a corner”.
The Pound meanwhile was under pressure against a number of peers after concerns grew that the UK housing market could be experiencing a slowdown. Data released earlier in the week caused investors to trim their bets that the Bank of England will introduce an interest rate hike later in the year.
The US Dollar continues to find support from data released earlier in the week that indicated that the world’s largest economy is improving.
Euro Exchange Rates