Euro Steady as Germany's Economy Beats Expectations

The Euro exchange rate held steady on Thursday after Germany's economic growth exceeded expectations in the second quarter, while preliminary inflation accelerated sharply in July.

German GDP expanded by 0.2% quarter-on-quarter in Q2, beating forecasts for growth of 0.1%, and annual GDP growth accelerated to 0.9%. Exports helped support the economy, but household consumption remained subdued and capital investment declined.

The stronger GDP figures provided evidence that Germany retained some momentum despite higher energy costs and disruption linked to renewed conflict in the Middle East.

However, German consumer price inflation accelerated to 2.8% year-on-year in July from 2.3% in June, matching market expectations. Energy inflation surged to 8.3% from 3.4%, reflecting the impact of higher fuel and energy costs.