Germany released second quarter preliminary GDP data today which indicate a slowdown in the German economy between April and June. First quarter data was also revised downwards as the economy was weaker at the start of the year than previously thought.
Data show the economy grew by just 0.1% in Q2 while economists had forecast growth of 0.5%. Q1 was revised down to 1.3%.
The growth figures are disappointing considering Germany is known to be Europe’s powerhouse. However after the data, concerns are growing that the debt crisis is beginning to stagnate the euro region.
EURUSD dropped from 1.4409 to 1.4394 within a minute of the news at 06:00 GMT, then extended its fall to 1.4365 after an hour and a half.
The focus now turns to GDP data for the whole of the eurozone which will be released later this morning at 09:00 GMT. Expectations are for euro-area growth to slow to 0.3% in the second quarter from 0.8% in the first quarter, indicating a stagnation in the region’s economic growth.