July 28th, 2020
Q2 GDP releases from the United States and euro zone later this week are expected to show some U.S. outperformance despite historic contractions on both sides of the Atlantic during pandemic lockdowns. Consensus forecasts - from wildly varying forecasts - point to quarter-on-quarter contractions of 12% in the euro zone and 8.5% in the U.S. However, incoming economic data surprises from euroland since mid-year have significantly narrowed the gap with the States - aiding the surge in the euro/dollar exchange rate to its highest in almost 2 years this week.
Chart by Ritvik Carvalho and commentary by Mike Dolan.
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