The United States GDP fell by -0.9% this Q2. The American economy contracts once again for a successive quarter after it contracted by -1.6% in Q1. Forecasts initially expected a 0.3%-0.5% expansion of the US economy, but reality proved much worse than expectations. This is bad news for the US and global economy as it sends strong recession signals. The US dollar was marginally weaker overall yesterday and the dollar index headed for a second straight weekly loss to its lowest level since July 5. GBPUSD hit a 1-month high at 1.2208 and is up for the week and month.
In France, consumer prices soared by 6.1% in July over one year after rising 5.8% in June according to INSEE, their highest level since the 1980s. spread throughout the economy with prices up 3.9% in services, 2.9% in manufactured goods and 6.7% in food products.
Still up nearly 29%, energy prices are nonetheless slowing down, reflecting the recent drop in oil prices. Over one month, consumer prices increased by only 0.3% against +0.7% in June, also calmed down by the discounts offered during the summer sales. French GDP saw growth in Q2 as the economy grew by 0.5%.
Germany on the other hand saw no growth in Q2 in large part due to rising energy costs with the Nordstream 1 pipeline shut for part of July and flow limited to 40% until last week, which has now gone down to 20%.
CPI figures in July for the eurozone remain alarmingly high and show that inflation grew by 8.9%. However, GDP figures show that the EU grew its economy by 0.7% in Q2 as a group, well aided by the good Spanish figures this morning as the country saw its economy grow by 1.1% in Q2.
Cable saw small gains yesterday. GBPUSD opened at 1.2148 Monday and closed at 1.2169 on Thursday.
GBPEUR followed a similar trend. The pair opened at 1.1904 and closed at 1.1942 yesterday.
EURUSD remained stable. The pair opened at 1.0198 and closed at 1.0196 yesterday.