By IFCMarkets

FR40 is rising despite weak French data

French economic data in the last couple of weeks after the report French economy contracted in fourth quarter of 2019 were weak. While retail sales growth increased in February, the deficits of budget, trade and current account came in bigger than feared. Thus, retail sales growth rose to 3.4% over year in February after 2.6% increase in previous month. However deficits of budget, trade and current account widened to bigger than expected 35.2, 5.2 and 3.8 billion euros respectively in February. At the same time, a smaller than expected slowing in industrial output growth over month in February was a positive development. Weak economic data are downside risk for FR40. Against the background of massive toll the shutdowns exacted on the country’s economy the French government undertook fiscal and monetary stimulus programs to prop flailing businesses. Thus the government announced on March 17 a $49 billion aid package that includes : social security tax cuts, unemployment benefits for people forced to work part time, and a fund to help shopkeepers and the self-employed. At the same a loan guarantee program of up to $327 billion to help businesses was announced. Stimulus programs by numerous developed economies, including the US and European Union, buoyed investors’ confidence, leading to recovery in equity markets.

Summary of technical analysis

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