Euro area economic growth expands above potential in Q3

The euro area economy expanded above potential in the third quarter of this year. The GDP grew 0.6 percent. According to a Nordea Bank research report, private consumption and capital spending mainly drove the euro area economy in the September quarter.

Amongst the larger nations, Spain unsurprisingly recorded the highest growth again, rising 0.8 percent sequentially, down from 0.9 percent in the second quarter. Meanwhile, the French economy grew 0.5 percent in the third quarter, coming in line with expectations. Domestic demand growth accelerated further to 0.6 percent quarter-on-quarter.

But imports rose more than exports, signifying that net exports weighed on the growth. The growth outlook is positive both cyclically and structurally given President Macron’s attempts to repair the labor market, stated Nordea Bank.

“Assuming no significant downward revisions and growth in Q4 broadly in line with the speed on the summer half-year, our growth forecast for the full year 2017 (2.1 percent) is slightly too low. The main risk for the 2018 forecast (1.8 percent) is also on the upside”, added Nordea Bank.

At 15:00 GMT the FxWirePro's Hourly Strength Index of Euro was bearish at -84.3698, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 35.7518. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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