When is German GDP data and how could it affect EUR/USD?


German GDP overview

Germany's preliminary gross domestic product (GDP) for the first quarter, scheduled for release at 06:00 GMT, is expected to show the old continent's biggest economy contracted by 2.2%, having expanded by 0.4% in the final three months of 2019. 

A GDP reading of -2.2% or lower would be the worst since the first quarter of 2009. 

Bigger-than-expected contraction likely

Germany announced a national curfew on March 22, meaning the economic activity came to a standstill only in the last 8 or 9 of the first quarter. 

However, Germany is dependent on China, which suffered a sharp slowdown in the activity in the first two months of the year due to the coronavirus outbreak. 

Hence, the possibility of Germany reporting a bigger-than-expected contraction in the first quarter cannot be ruled out.  While economists are expecting a 2.2% contraction, Germany's DIW economic institute said last month that economy likely contracted by 2% in the first quarter. The DIW expects a 10% decline in the GDP in the second quarter. 

Impact on EUR/USD

That the coronavirus outbreak brought major economies to their knees in March and more so in April is generally accepted by now and priced in. Hence, EUR/USD may see little or no action if the GDP prints in line with estimates. 

While a surprise beat on expectations could put a bid under the EUR, the resulting gains would be short-lived, if the risk sentiment sours. 

As of writing, the futures on the S&P 500 are flatlined and the Asian stocks are putting in a mixed performance. The US stocks rallied on Thursday as investor optimism emanating from the reopening of the US economy and possibly from talks of additional US fiscal stimulus overshadowed the dismal weekly US jobless claims data. 

However, White House's advisor Larry Kudlow said late Thursday that the Trump administration is not in favor of another general massive infusion of liquidity, but is open to a targeted stimulus for states affected by the pandemic. 

Kudlow's comments may take the wind out of the risk sentiment, sending the safe-haven US dollar higher. EUR/USD is currently trading near 1.0805, representing a 0.13% drop on the day, having put in a low of 1.0775 during the Asian trading hours. 

Description

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 the 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).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD consolidates, bulls eye push towards 0.7400

AUD/USD is currently trading just below Tuesday highs at 0.7369, as bulls eye a push towards the 0.7400 level. A significant improvement in global risk appetite gave AUD a boost on Tuesday and sets the currency up well for the coming Wednesday Asia session.

AUD/USD News

Gold consolidates above $1,800, hangs near four-month lows

Gold holds just above the $1,800 threshold while taking rounds close to four-month lows. The hopes of the US stimulus and recovery from the coronavirus (COVID-19) keep the gold bears hopeful. DJI30, S&P 500 closed at the record top, DXY eased.

Gold news

NZD/USD wavers around 2.5-year high below 0.7000 even as RBNZ’s Orr backs low interest rates

NZD/USD keeps the choppy trading above 0.6965, easing five pips off-late. RBNZ Governor Adrian Orr says low interest rates ensure NZD’s competitiveness. A light calendar in Asia highlights risk news for fresh impulse.

NZD/USD News

On-chain metrics spell trouble for Bitcoin, Ethereum, and XRP despite on-going bull rally

The top three cryptocurrencies are seeing massive gains over the past few days. BTC price is close to its all-time high, currently trading at $19,300. XRP had a massive 242% colossal rally in the past week. ETH also closely following BTC's step.

Read more

Black Friday 2020 Discounts!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info

Forex MAJORS

Cryptocurrencies

Signatures