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

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex News

Editors’ Picks

EUR/USD chops around amid end-of-month flows, ahead of Trump

EUR/USD is battling 1.11, close to the two-month highs amid choppy trading. Hopes for a fiscal boost in Europe and mixed satisfactory data have supported the currency pair. , Sino-American tensions are rising and investors await President Trump's China announcement.

EUR/USD News

GBP/USD advances amid US dollar weakness, shrugging off concerns

GBP/USD is trading above 1.23, edging higher amid US dollar weakness and Britain's gradual reopening. Intensifying Sino-American tensions and the Brexit impasse are ignored. 

GBP/USD News

Cryptocurrencies: $348M in matured derivatives boost the market

Futures and options contracts' expiration brings a wave of volatility to the crypto market. Ethereum takes advantage and attacks resistances in the market dominance chart, Bitcoin goes back. Ripple disappoints despite regaining the third place in market capitalization.

Read more

Canada's economy falls by 8.2% annualized in Q1, better than expected, USD/CAD shakes

The Canadian economy squeezed by an annualized rate of 8.2% in the first quarter of 2020, better than -10% expected. Quarterly, Gross Domestic Product (GDP) squeezed by 2.1%. Most of the downfall occurred in March, with a drop of 7.2%, better than 8.5% projected. 

Read more

WTI drops 4% and eyes $32 mark amid risk-off, weakening demand

The selling pressure around WTI (July futures on Nymex) accelerates following the break below the 33 level, as bears now target the 32 support zone heading into the key US macro data and US President Donald Trump’s response to the Hong Kong issue.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures