Euro Gained Value Against the Dollar

The euro edged higher against the dollar on Friday as investors assessed the impact of key European economic data as well as contracting US growth and Federal Reserve rate hikes.

The EUR/USD pair was trading up 0.40% at $1.0237 at 02:52 EST (0652 GMT). Today, all eyes will be on Eurozone gross domestic product figures for the second quarter. Economists expect GDP to rise 0.2% in the period, slowing from quarterly growth of 0.6% in the first three months of the year. France's GDP also rose 0.5% in the quarter, beating expectations for 0.2% growth. However, downside risks remain, as evidenced by European Central Bank Governing Council member Ignazio Visco's warning on Thursday that the region is still likely to slip into recession. Data released on Thursday showed that the US economy contracted further in the second quarter; the country's gross domestic product fell by 0.9% on an annualized basis last quarter, following a contraction of 1.6% in the previous quarter. While two consecutive quarters of negative growth is widely seen as the technical definition of a recession, the US does not fit that description. On Wednesday, the Fed also suggested that the slowdown in economic activity could lead it to put the brakes on raising borrowing costs. The comment came after the central bank raised interest rates by 75 basis points for the second month in a row in a bid to curb rising inflation. The US Dollar Index fell 0.63% to 105.68 on Friday, its weakest level since July 5. The dollar's measure against a basket of several other major currencies is heading for its second consecutive weekly loss.