Germany’s Lindner: Economic outlook is fragile

Dhwani Mehta FXStreet

Germany’s Finance Minister Christian Lindner said on Wednesday that the economic outlook for the euro area’s powerhouse is fragile.

He added that “the economic situation is deteriorating.”

Earlier on, Lindner had said that high inflation in Germany was eroding economic foundations.

Germany is bearing the brunt of the Russia-Ukraine war, as the European gas crisis deepens. The economy is on brink of recession, as companies expect significantly worse business activity in the coming months.

Despite growing recessionary fears, the European Central Bank (ECB) remains on track for a 50 bps rate hike at its September meeting. The eurozone money markets now fully price in 50 bps rate increase next month.

Market reaction

EUR/USD is testing bids around 1.0200, seeing renewed selling pressure amid a minor recovery in the US dollar and a risk-off market profile. All eyes remain on the US inflation data for a fresh direction in the pair.

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.

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