The release of upbeat European economic data helped the euro advance for a third day against the US dollar.

GDP for both France and Germany, two of Europe's largest economies, unexpectedly grew 0.3% in the second quarter. Bloomberg News was expecting contractions of 0.2% in Germany and 0.3% in France. In the meantime, a separate report released this morning revealed that the overall eurozone economy shrank by 0.1% in the second quarter, substantially better than expectations for a 0.5% drop. 'We're getting pretty excited about these numbers, seeing big hitters in euro-land both moving back into the black, and that's why the euro is higher,' said Neil Jones of Mizuho Corporate Bank.

'We're in a risk-on mode today and we'd therefore expect the euro to appreciate.'The second-quarter GDP data released today contradict the view that Europe will emerge from the recession at a later stage; the data suggests that it may in fact beat the US and UK out of this recession. This has made economists at ICAP bullish on the euro against the dollar: 'I expect growth in the eurozone economy will be very high' later this year and that should benefit the euro, said Adam Carr of ICAP Australia. Mr Carr believes that EUR/USD may advance to $1.50 toward the end of year.