On Friday, the German economy was under the spotlight. Finalized Q4 GDP numbers drew investor interest.
The German economy contracted by 0.3% quarter-on-quarter in Q4, unchanged from preliminary estimates. In Q3, the German economy stalled.
According to Destatis,
Year-on-year, the German economy contracted by 0.2% in Q4 after contracting by 0.3% in the previous quarter.
The German economy remains a focal point for the ECB. However, recent private sector PMI numbers likely eased immediate fear of the German economy dragging the Eurozone economy into a recession. Nonetheless, the threat of a technical German recession could pressure the ECB to begin discussing interest rate cuts.
Before the German GDP numbers, the EUR/USD fell to a low of $1.08148 before rising to a high of $1.08319.
However, in response to the GDP numbers, the EUR/USD fell to a low of $1.08238 before climbing to $1.08270.
On Friday, the EUR/USD was up 0.02% to $1.08253.
German business sentiment, consumer inflation expectations, and ECB commentary will be in focus.
Economists forecast the Ifo German Business Climate Index to increase from 85.2 to 85.5 in February. Better-than-expected figures could signal a shift in momentum in the German economy. However, the ECB Consumer Inflation Expectations Survey could have more influence on the ECB. Wage growth and inflation remain the focal points for the ECB.
With Germany and inflation in focus, ECB commentary needs consideration. ECB President Christine Lagarde and Executive Board member Isabel Schnabel are on the calendar to speak.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.