Forex Flash: German economic fortitude should drive Eurozone growth – ANZ (Barcelona) - Data from the eurozone has remained mixed as of late, however in general, the trend is improving and is supporting expectations that the worst of the downturn is over. Following the much stronger than expected German ZEW survey in January (31.5 vs 6.9 in December), a strong January PMI (manufacturing index 48.8 vs 46.0) has prompted upward revisions to German GDP forecasts this year.

German Economic Minister Roesler expects growth to significantly exceed the 0.4% forecast for 2013. “As Germany accounts for roughly 27% of euro area GDP, the risk is that GDP for the single currency area will exceed expectations.” writes Brian Martin and Amber Rabinov at the ANZ Research Team – the IMF predicts that euro area growth will fall 0.2% this year.

Moreover, “We could argue that Germany is a special case as its economy has managed to withstand, by-and-large, the blizzard experienced in the peripherals. However there are grounds for optimism that a pick-up in Germany, at the margin, should translate into improved activity elsewhere in the euro area and that normal transmission channels for growth will be restored.” they add.