German Preliminary GDP contracts 1.7% in Q1 vs. -1.5% expected, EUR/USD battles 1.21

German GDP arrives at -1.7% QoQ in Q1 vs. -1.5% expected.
Annualized German GDP stands at -3.0% in Q1 vs. -3.2% expected.
EUR/USD unmoved on mixed German Q1 growth numbers.

Dhwani Mehta FXStreet

The German economy shrank 1.7% inter-quarter in the first quarter of 2021 when compared to the expectations of -1.5% and +0.3% seen in Q4, the preliminary report published by Destatis showed on Friday.

Meanwhile, the annualized GDP rate fell by 3% in Q1 against the previous reading of -3.7% and beat market expectations of -3.2% contraction.

Separately, the Italian economy contracted by 0.4% QoQ in Q1 but bettered estimates of -0.5% and -1.8% previous.

EUR/USD unfazed on data

EUR/USD remains little changed on mixed German growth numbers, as the sentiment remains tepid, which helps the US dollar bounce.

The major was last seen trading at 1.2100, down 0.15% on the day.

About German Prelim GDP

The Gross Domestic Product released by the Statistisches Bundesamt Deutschland is a measure of the total value of all goods and services produced by Germany. The GDP is considered as a broad measure of German economic activity and health. A high reading or a better-than-expected number has a positive effect on the EUR, while a falling trend is seen as negative (or bearish).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD extends the drop to 1.3360

GBP/USD builds on Monday’s decline and briefly clinches five-day lows near 1.3360 on Tuesday. Cable’s extra pullback follows the better tone in the Greenback as uncertainty in the Middle East prompts investors to adopt a cautious stance. Meanwhile, an apathetic UK labour market report also collaborates with the selling pressure on the British Pound.

EUR/USD looks inconclusive near 1.1420

EUR/USD trades in a tight range in the low 1.1400s on Tuesday, struggling to gain momentum amid an equally absence of clear direction in the US Dollar (USD). Uncertainty surrounding the US-Iran conflict is capping the pair’s upside, while traders avoid taking significant positions ahead of Thursday’s ECB gathering.

Gold shows signs of life; focus is back to $4,100

Gold gains ground on Tuesday, reversing Monday’s pessimism and advancing toward the $4,100 mark per troy ounce. Nevertheless, uncertainty surrounding the Middle East conflict and rising expectations for a hawkish Fed policy outlook are expected to limit the precious metal’s bullish momentum in the near term.

XRP extends recovery as on-chain activity grows

Ripple (XRP) ticks up and trades around $1.13 at the time of writing on Tuesday. This rebound aligns with a broader recovery in the cryptocurrency market, attributed to reports that mediators between the United States (US) and Iran are seeking a 10-day cessation of strikes to find a way back to the signed Memorandum of Understanding (MoU).

The Iranian war has again risen

The Iranian war has again risen to the top of the economics factor list. There is no end in sight. Intelligence experts say the current level of offense/retaliation will not change minds in Tehran, while in Washington, Trump fears all-out war, which would mean boots on the ground.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.