European session review: EUR mostly lower after disappointing Q2 GDP data out of Germany

EUR fell against most major currencies in the European session on Thursday, as Germany's Q2 GDP data revealed a record decline in output of Europe's largest economy, disappointing market participants. EUR retreated against USD, GBP, CHF and JPY, but was higher against AUD, CAD and NZD.

Destatis reported that its preliminary estimate showed that Germany's GDP declined 10.1 percent q/q in the second quarter of 2020 after dropping 2 percent q/q in the first quarter. This was the largest decrease since the records began in 1970. Economists had forecast a slump of 9 percent q/q. Steep falls were recorded for exports and imports of goods and services as well as for household consumption and capital formation in machinery and equipment. General government, however, raised its spending in efforts to support the economy amid the coronacrisis. In y/y terms, the country's GDP plunged 11.7 percent in the second quarter versus economists' forecast for a decline of 11.3 percent. 

Federal Employment Agency, in its turn, reported that Germany's unemployment decreased by 18,000 to 2.923 million in July, while economists had forecast an increase of 43,000. This was the first drop since February. At the same time, the jobless rate remained at 6.4 percent (the highest since August 2015) versus economists' forecast for a rate of 6.5 percent.