The euro zone economy rebounded much more than expected in the third quarter from its coronavirus-induced slump, but the recovery is likely to be cut short as countries reintroduce restrictions to stem a second wave of the pandemic. Gross domestic product in the 19 countries sharing the euro surged 12.7% quarter-on-quarter in the third quarter after contracting 11.8% in the second, the European Union's statistics office, Eurostat, said. The euro zone average was boosted mainly by the countries that experienced the harshest lockdowns in the second quarter --France, Italy and Spain -- which all registered quarterly growth between 16.1% and 18.2%, preliminary data showed.
EUR/USD settled below the support at 1.1695 and is trying to get to the test of the next support at 1.1630.
The dollar paused its climb on Friday, while the euro wallowed near its four-week low against the greenback after the European Central Bank signalled further monetary easing by the end of the year. Overnight, the euro's decline in addition to U.S. data helped lift the greenback to a near four-week high against a basket of currencies. The ECB kept interest rates steady on Thursday but committed to contain the growing fallout from a second wave of coronavirus infections, saying it would hone its response by its December meeting, as widely expected by the market.