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The European Commission in its latest forecast lowered the eurozone Gross Domestic Product (GDP) growth to 3.8% in 2021 from 4.2% in its previous publication. On a positive note, 2022 growth forecast got revised up to 3.8% from 3%. 

“The near-term outlook for the European economy looks weaker than expected last autumn, as the pandemic has tightened its grip on the continent,” the Commission noted in its publication, per Reuters. 

“The European economy is thus expected to have ended 2020 and started the new year on a weak footing. However, light has now appeared at the end of the tunnel,” the report further read. “As vaccination campaigns gain momentum and the pressure on health systems to subside, containment measures are set to relax gradually.”

Market reaction

The EUR/USD pair edged slightly lower on these figures and was last seen posting small daily gains at 1.2124.