EUR/USD continues with its losing ways in the Tuesday session. Currently, the pair is trading at 1.1349, down 0.21% on the day. On the release front, Eurozone Preliminary Flash GDP dipped to 0.2%, shy of the estimate of 0.4%. Later in the day, Germany releases Preliminary CPI with an estimate of 0.1%. In the U.S, CB Consumer Confidence is expected to dip to 136.3 points.
The eurozone economy continues to worry policymakers. Economic performance has softened in the third quarter, as Preliminary Flash GDP dipped to 0.2%, down from a 0.4% gain in the second quarter. On an annualized basis, Q3 growth was 1.7%, down from 2.2% in the second quarter. Much of the slowdown can be attributed to the crisis over the Italian budget, which was rejected by the European Commission since it breached EU regulations over debt limits. There was more bad news on Tuesday, as the European Commission reported that economic confidence fell in the eurozone for a tenth straight month. The indicator dropped sharply to 109.8, down from 110.9 points a month earlier. Confidence is lower in the manufacturing and services industries, and retail services managers reported “much grimmer views on the present and expected business situation”. Economic confidence has fallen in Germany, France and Italy, which could translate into further headwinds for the euro in the fourth quarter.
