The German government is on course to cut its growth forecasts for 2019 to only 0.5%. This will be the second substantial cut after Europe’s largest economy already slashed GDP projections from 1.8% to 1% back in the autumn.
The downgrade stems from weaker global demand, fears of a trade dispute with the US, issues related to the car industry, and additional factors.
The International Monetary Fund called on Germany to loosen its purse strings and stimulate the economy but these calls have fallen on deaf ears so far. The IMF’s forecast for the euro zone’s locomotive stands at 0.8% this year.
EUR/USD trades around 1.1320, around the highs of the day, currently ignoring the news. Resistance awaits at 1.1330 and is followed by 1.1360. Support awaits at 1.1280.
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