Euro Appreciates As Eurozone Economic Growth Beats Forecasts

The euro climbed against its most major counterparts in the European session on Friday, as the euro area economy expanded more than forecast in the second quarter, signaling that the bloc's recovery is under way.

Flash estimate from Eurostat showed that gross domestic product expanded 2 percent sequentially, reversing the 0.3 percent drop posted in the preceding period. The growth rate was bigger than the expected 1.5 percent.

On a yearly basis, GDP rebounded 13.7 percent after shrinking 1.3 percent in the first quarter. GDP was forecast to grow 13.2 percent.

Separate data from Eurostat showed that Eurozone inflation accelerated more-than-expected in July, largely driven by higher energy prices.

Inflation rose to 2.2 percent in July from 1.9 percent in June. The rate was above the expected 2 percent.

A falling dollar on the back of the Fed's reassurance that rate increases were far off also underpinned the euro.

The euro spiked up to more than a 4-week high of 1.1909 against the greenback and a 3-day high of 0.8524 against the pound, off its prior lows of 1.1875 and 0.8509, respectively. The euro is seen finding resistance around 1.22 against the greenback and 0.86 against the pound.

The euro rose to 130.50 against the yen and 1.7005 against the kiwi, recovering from its early low of 130.02 and a 3-day low of 1.6933, respectively. The next possible resistance for the euro is seen around 132.00 against the yen and 1.72 against the kiwi.

The euro jumped to more than a 7-month high of 1.6165 against the aussie, after falling to 1.6061 at 11 pm ET. On the upside, 1.64 is possibly seen as the next resistance level for the euro.

In contrast, the euro fell to its lowest level since January 29 against the franc, at 1.0762. The euro is likely to find support around the 1.045 level.

After rising to 1.4820 in the Asian session, the euro eased off and held steady against the loonie. At yesterday's close, the pair was worth 1.4786.

Looking ahead, Canada GDP data for May, U.S. personal income and spending data for June and University of Michigan's final consumer sentiment index for July will be featured in the New York session.