European session review: EUR under pressure despite better-than-expected Q3 GDP readings from EU countries

EUR fell against most of its major counterparts in the European session on Friday despite the release of mostly better-than-forecast Q3 GDP readings from the EU's major economies.

Eurostat reported that Eurozone's GDP climbed 12.7 percent q-o-q in the third quarter. This marked the sharpest growth seen since the series started in 1995. Economists had forecast a growth of 9.4 percent q-o-q after a 11.8 percent q-o-q drop in the second quarter. On a yearly basis, the euro-area economy contracted 4.3 percent after falling 14.8 percent in the second quarter. GDP was forecast to decline 15 percent in y-o-y terms. Among member countries, France recorded the biggest q-o-q increase in GDP (+18.2 percent), followed by Spain (+16.7 percent) and Italy (+16.1 percent). Germany's economy expanded by 8.2 percent in the third quarter.

A separate report from Eurostat revealed the Eurozone’s unemployment rate was unchanged at 8.3% in September, remaining the highest since April 2018. This was in line with economists’ expectations.

The European single currency remained pressured by the ECB's hints that further monetary easing might come in December. “We agreed, all of us, that it was necessary to take action and therefore to recalibrate our instruments at our next Governing Council meeting,” ECB President Christine Lagarde said yesterday.

In addition, investors' sentiment continued to be dented by growing coronavirus cases around the globe and imposition of fresh restrictions, as well as uncertainty about the U.S. presidential election, which is to take place in less than a week.