EURUSD: Economic influence!According to The Guardian on June 8, gross domestic product (GDP) across the eurozone fell 0.1% in the first quarter of this year, worse than the previous forecast that the eurozone economy just stalled.
Specifically, Eurozone GDP shrank by 0.1% in the fourth quarter of 2022, meaning that the eurozone economy shrank for two consecutive quarters. The definition of a recession is an economic contraction for two consecutive quarters.
The GDP of the Eurozone fell due to being dragged down by Ireland. Ireland's GDP fell 4.6% in the first quarter of this year, although economists have questioned whether that really reflects the performance of the Irish economy.
The Lithuanian economy shrank 2.1%, while the Dutch economy shrank 0.7%. Germany, Europe's largest economy, shrank 0.3% and also fell into recession.
The European economy has been hit by economic disruptions amid the conflict in Ukraine, which has sent energy and food prices soaring.
This situation has led to a series of rate hikes, as the European Central Bank (ECB) seeks to combat higher inflation.
Diego Iscaro, Head of European Economics at S&P Global Market Intelligence, forecasts that as the impact of higher interest rates has yet to be fully felt, economic activity in the eurozone will be sluggish throughout. remainder of 2023.
