European session review: EUR mixed after record decline in Eurozone's GDP and surprise uptick in bloc's CPI inflation

EUR traded mixed against its major rivals in the European session on Friday after official data revealed that the Eurozone's economy contracted by the fastest rate on record in the second quarter and the bloc’s annual inflation unexpectedly edged up in July.

EUR fell against GBP, USD and CAD, rose against JPY and NZD, and was little changed against CHF and AUD.

Eurostat reported on Friday its flash estimate showed that the Eurozone's gross domestic product (GDP) shrank by 12.1 percent q/q in the second quarter of 2020, following a 3.6 percent q/q decline in the first quarter. That was the biggest contraction on record, as lockdowns imposed to contain the spread of the coronavirus pandemic hit activity and global demand. Economists had forecast a 12 percent q/q fall. All major economies in the region posted record declines in GDP in the second quarter. In y/y terms, the Eurozone's economy contracted by a record 15.0 percent compared to economists' expectations of a 14.5 percent decline.

A separate report from Eurostat revealed that the Eurozone's annual inflation edged up unexpectedly to 0.4 percent in July from 0.3 percent in June. Economists had forecast the rate to decline to 0.2 percent. Meanwhile, the annual core inflation, which excludes volatile prices of energy, food, alcohol and tobacco, and at which the ECB looks in its monetary policy decisions, accelerated to 1.2 percent this month from 0.8 percent in the prior month.