The Eurozone Gross Domestic Product fell more than expected in the fourth quarter of 2008 according to a flash estimate released by Eurostat today. The 16-nation eurozone GDP declined by 1.5 percent in the October to December quarter following GDP contraction of 0.2 percent in the third quarter. The eurozone entered into recession after the third quarter GDP contracted for the second quarter in a row following the second quarter 0.2 percent contraction. On an annual basis, the fourth quarter GDP is 1.2 percent lower than the fourth quarter of 2007.
Today’s data surpassed economic forecasts that were expecting the GDP to decline by 1.3 percent and marked the largest GDP contraction on record for the eurozone.
Germany, the eurozone’s largest economy, saw a GDP decline of 2.1 percent in the fourth quarter following a GDP decline of 0.5 percent in the third quarter. Italy’s GDP declined by 1.8 percent in the fourth quarter after declining by 0.6 percent in the third quarter. France, the eurozone’s second largest economy, also saw their economy decline in the fourth quarter as GDP decreased by 1.2 percent after posting economic growth of 0.1 percent in the third quarter.
Today’s flash estimate is followed up by two more revised GDP releases that are scheduled for release on March 5, 2009 and April 7, 2009.
Euro falls in currency trading.
The currency markets today have seen the euro weaker in trading against most of the other major currencies. The euro has fallen versus the U.S. dollar, British pound, Australian dollar, New Zealand dollar, Swiss franc and Canadian dollar while gaining against the Japanese yen.
The euro has declined against the US dollar as the EUR/USD trades at 1.2891 in the afternoon in the US session at 2:21pm EST after opening the day at 1.2927. The euro has declined versus the Canadian dollar as the EUR/CAD trades at 1.5959 after opening at 1.6042. The euro has also declined versus the Australian and New Zealand dollars as the EUR/AUD trades at 1.9538 from 1.9665 and the EUR/NZD trades at 2.4523 from the 2.4697 opening.
Against the Swiss franc, the euro has declined as the EUR/CHF fell from 1.4972 to trading at 1.4932 while the euro has also fallen against the British pound as the EUR/GBP trades at 0.8971 after opening at 0.8992. The euro has advanced today versus the Japanese yen as the EUR/JPY trades at 118.33 from the 117.63 opening.
EUR/GBP Chart – The Euro falling against the British Pound today in Currency Trading and trading right at the level of the 55-day simple moving average.
