Germany’s economic output rose 0.7% in the last quarter of 2014, and 1.6% year over year. This is certainly a robust growth rate that beat all estimations.
EUR/USD is actually down on the news, slipping to 1.1417. Do markets fear negative ramifications for Greece following this German strength?
Critics may say that falling prices made a relatively not too impressive nominal GDP growth rate look better. On the other hand, we have received positive jobs numbers from the country of late. The weaker euro probably contributed to stronger growth as well.
Angela Merkel gets the necessary support from GDP, which piles up on her success (so far) to broker a deal in Ukraine. This bodes well for the elections in Hamburg.
Germany, Europe’s largest economy, was expected to grow by 0.3% in Q4 2014, stronger than 0.1% for Q3. Year over year, a growth rate of 1% was predicted.
EUR/USD enjoyed the greenback’s weakness and traded around 1.1430 just before the event. The US dollar has been on the back foot since the release of unfavorable retail sales numbers yesterday.
In addition, Germany’s WPI was released at the same time, and it was expected to be negative. WPI fell 0.4% m/m and 2.6% y/y.
France reported a quarterly growth rate of 0.1%, as expected, but y/y it’s only 0.2% – not exactly a picture of strong growth. We later have GDP from Italy and the full euro-zone numbers.
Here is the preview: how to trade the German GDP with EUR/USD.