The euro stays in tight range against dollar as markets are looking forward to Q2 GDP data from Eurozone today. German GDP is expected to contract -0.1% qoq versus Q1's impressive 0.8% qoq. French GDP is expected to grow 0.1% qoq versus Q1's % qoq. Overall Eurozone GDP is expected to grow 0.1% qoq versus Q1's 0.2% qoq. Eurozone will also release July CPI final and ECB monthly bulletin. According to a Reuters poll, economists expected a 15% chance that ECB will adopt quantitative easing this year, and over 30% chance in 2015. Economists noted that the eurozone is facing the problem of losing momentum in recovery together with deflationary risks. And indeed, the Eurozone could be one major shock away from deflation. Geopolitical risks in Ukraine also posted downside risks to Eurozone's growth.
Also, in Eurozone, Bundesbank chief Weidmann said yesterday that "the temptation to boost the competitiveness of our economies by weakening the euro should not be the purpose of the single currency." And he emphasized that "a strong Europe and a strong euro go hand in hand." Meanwhile, he urged France to set an example on budgetary discipline as "growth must come from inside". This was seen as response to French's call for ECB and German measures to boost Eurozone growth.
Technically, euro is mixed in generally. The rebound in the EUR/GBP extended this week, primarily based on Sterling's weakness. However, recovery in the EUR/AUD and EUR/CAD lost steam. Teh EUR/USD is also stuck in tight range above 1.3332 temporary low. We'd probably see the euro having little reactions to today's important data but follow the trend of others.
Elsewhere, the New Zealand business manufacturing index dropped to 53 in July, retail sales rose 1.2% qoq in Q2. Japan machine orders rose 8.8% mom in June. UK RICS house price balance dropped to 49 in July. Swiss will release PPI, Canada will release new housing price index and US will release import price and jobless claims today.