EUR/USD Steady as French GDP Rebounds 0.2% in Q2, Momentum Remains Weak

EUR/USD faces mixed signals following France's Q2 2026 preliminary GDP data, which showed a 0.2% quarter-over-quarter rebound, matching expectations and reversing the prior quarter's -0.1% contraction. However, the year-over-year reading came in slightly below forecasts at 0.7% versus the 0.8% expected, down from the previous 0.9%, underscoring that overall economic momentum in the Eurozone's second-largest economy remains sluggish. The modest recovery was primarily driven by a slight improvement in domestic demand, which contributed +0.1% to GDP growth after subtracting -0.2% in Q1. While the data confirms France avoided a technical recession, the tepid pace of expansion offers limited upside support for the euro. Traders should monitor upcoming Eurozone-wide GDP figures and ECB policy signals for further direction. The lackluster growth trajectory may reinforce expectations for continued ECB accommodation, potentially capping EUR/USD gains. Near-term, the pair is likely to remain range-bound as markets digest broader macro data from both sides of the Atlantic.