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In an interview with German broadcaster SWR, the head of the country’s influential IFO institute, Clemens Fuest, said that he sees a recession in Europe’s most powerful economy due to the coronavirus crisis.

Further comments

Sees the world on the brink of an economic crisis and that there are parallels to the year 2008 when the financial crisis broke.

Germany’s government had acted correctly by facilitating access to the short-time work allowance. But more must be done.

  • Germany’s Altmaier: Main priority is to slow the spread of the coronavirus to avoid recession

EUR/USD: Further correction on the cards?

With markets predicting a German recession, clearly there are increased chances that the European Central Bank (ECB) would likely cut the key rate this week.

In light of the potential ECB move, the shared currency could extend its corrective slide against the US dollar. 

At the time of writing, EUR/USD is bouncing off the session low of 1.1322 and trades at 1.1362, still down 0.72%.