According to statistics published on Tuesday, economic activity in the European Union declined at an annualized rate of 0.7 percent in the second quarter of this year, following a similarly brutal first quarter. Although imports to the region are down across the board, economists are concerned that the region’s leaders are still not spending enough locally when they are able, a move of caution that may actually be hindering growth. Coming under specific criticism was Germany, a country whose growth has slowed significantly, but is still outperforming its neighbors, with a low unemployment rate of 6.8 percent. Despite this lukewarm data, investors remain markedly confident that a stimulus is in the works, and European shares continued to rally during Tuesday’s trading in the US session and into Wednesday’s Asian session.
Currently the EUR/USD pair is trading at 1.2338, climbing up 0.11% from the previous low at 1.2322 as of 4:00 AM EST. The European session is expected to see yet another day of thin trading as French and Italian markets will be closed in celebration of national holidays. The common currency also gained against the yen and the pound. Investors are now waiting for today’s consumer price index coming out of the United States and a public report about the country’s crude oil inventories.