The Eurozone economy expanded faster than expected in the third quarter of 2025, offering a sign of resilience amid global uncertainty and stable inflation dynamics.
According to Eurostat’s preliminary estimate, Gross Domestic Product (GDP) grew 0.2% quarter-on-quarter (QoQ) in Q3, beating both the market consensus and the previous reading of 0.1%. On a yearly basis, growth accelerated to 1.3%, slightly above forecasts of 1.2%, though slower than the 1.5% recorded in the previous quarter.
Market Reaction
Following the release, the EUR/USD pair held onto 0.15% gains, trading around 1.1615 during Thursday’s European session. The moderate uptick reflects cautious optimism ahead of the European Central Bank (ECB) policy decision later in the day, where no change in rates is expected.
Euro Performance Snapshot
| Base / Quote | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| USD | — | -0.15% | 0.07% | 0.74% | 0.03% | 0.06% | -0.09% | -0.12% |
| EUR | 0.15% | — | 0.22% | 0.89% | 0.19% | 0.21% | 0.07% | 0.03% |
| GBP | -0.07% | -0.22% | — | 0.65% | -0.04% | -0.01% | -0.16% | -0.19% |
| JPY | -0.74% | -0.89% | -0.65% | — | -0.73% | -0.67% | -0.85% | -0.89% |
| CAD | -0.03% | -0.19% | 0.04% | 0.73% | — | 0.04% | -0.12% | -0.16% |
| AUD | -0.06% | -0.21% | 0.01% | 0.67% | -0.04% | — | -0.14% | -0.18% |
| NZD | 0.09% | -0.07% | 0.16% | 0.85% | 0.12% | 0.14% | — | -0.02% |
| CHF | 0.12% | -0.03% | 0.19% | 0.89% | 0.16% | 0.18% | 0.02% | — |
The Euro was strongest against the Japanese Yen, while posting smaller gains versus the US Dollar and Swiss Franc.
Germany’s GDP Remains Flat in Q3
Earlier on Thursday, data from the Federal Statistics Office showed that Germany’s economy recorded no growth (0.0%) in Q3, in line with expectations, after a 0.3% contraction in the previous quarter.
On an annualized basis, the German economy grew 0.3%, matching forecasts and marking a slight improvement from 0.2% in the same period last year.
Despite the stagnation, the stable reading signals that Europe’s largest economy may be finding its footing after several weak quarters.
Outlook: Focus Shifts to ECB and US Developments
Traders remain cautious ahead of the ECB’s policy announcement, where the central bank is expected to keep rates unchanged for a third consecutive meeting. Markets will closely watch President Christine Lagarde’s tone for hints on future policy direction.
Meanwhile, political and trade developments continue to influence market sentiment. Following a meeting between US President Donald Trump and Chinese President Xi Jinping in South Korea, the US announced plans to reduce tariffs on Chinese goods to 47% from 57%. China agreed to maintain rare earth exports and emphasized the “long-term benefits of cooperation.”
The US Dollar remains subdued amid uncertainty over the Federal Reserve’s December policy decision. While some policymakers have noted a pickup in inflation pressures, Fed Chair Jerome Powell has reiterated that another rate cut in December is “far from certain.”
EUR/USD Technical Outlook
At the time of writing, EUR/USD trades around 1.1610, maintaining a slight bullish bias in the short term.
- The 14-day Relative Strength Index (RSI) remains below 50, signaling mild bearish momentum.
- Initial support is seen at 1.1542 (October 14 low), followed by 1.1500.
- Immediate resistance lies near the 9-day Exponential Moving Average (EMA) at 1.1626, with stronger resistance at the 50-day EMA at 1.1656.
A sustained move above these levels could open the door for a recovery toward 1.17, while a break below 1.1540 would expose further downside.
Euro FAQs
What is the Euro?
The Euro (EUR) is the official currency of the Eurozone, comprising 20 European Union member states. It is the second most traded currency globally after the US Dollar, representing about 31% of global FX turnover.
What is the role of the ECB?
The European Central Bank (ECB), based in Frankfurt, manages monetary policy for the Eurozone. Its primary goal is price stability, aiming to keep inflation close to 2%. Changes in interest rates directly affect the Euro’s value—higher rates typically strengthen the Euro, while lower rates tend to weaken it.
How does economic data impact the Euro?
Data such as GDP, inflation (HICP), employment, and PMI surveys influence investor expectations of ECB policy. Strong data may support the Euro by raising the likelihood of tighter policy, while weak data typically pressures the currency lower.
What about trade balance effects?
A positive trade balance—when exports exceed imports—supports the Euro as foreign buyers need to purchase Euros to pay for goods. Conversely, a trade deficit tends to weigh on the currency.
