Euro Lower As Germany Falls Into Recession

(RTTNews) - The euro slipped against its major counterparts in the European session on Thursday, as official data showed German economy entered a technical recession in the first quarter of this year.

GDP declined a seasonally and calendar adjusted 0.3 percent from the fourth quarter of last year as household consumption slumped amid the rising cost of living that is fuelled by high inflation, revised data from the statistical office Destatis showed.

"After growth entered negative territory at the end of 2022, the German economy has now recorded two consecutive negative quarters," Destatis President Ruth Brand said.

Two consecutive quarters of output contraction is defined as a technical recession.

On a year-on-year basis, GDP shrunk 0.2 percent, reversing a similar size growth from the previous three months.

The euro fell to 0.9701 against the franc and 0.8665 against the pound, off its early highs of 0.9733 and 0.8705, respectively. Next key support for the currency is likely seen around 0.96 against the franc and 0.84 against the pound.

The euro dropped to 1.4569 against the loonie and 1.6404 against the aussie, from its early highs of 1.4621 and 1.6459, respectively. The euro may locate support around 1.44 against the loonie and 1.61 against the aussie.

The euro touched 1.0713 against the greenback, setting a fresh 2-month low. If the currency slides again, it may find support around the 1.05 area.

The euro weakened to 149.27 against the yen, reversing from an early 2-day high of 150.04. The next possible support for the currency is seen around the 145.00 level.

In contrast, the euro advanced against the kiwi, hitting a 3-week high of 1.7671. The currency is seen finding resistance around the 1.61 level.

Looking ahead, Canada preliminary manufacturing sales data for April, U.S. GDP data for the first quarter, U.S. weekly jobless claims and U.S. pending home sales data for April are slated for release in the New York session.

At 12:30 pm ET, Jonathan Haskel, member of the monetary policy committee, Bank of England, will deliver a speech at Peterson Institute for International Economics, Washington.