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The German economy is likely to contract at a strong pace in the first quarter of the year due to coronavirus-related restrictions, Germany’s Bundesbank said in its monthly report on Monday, per Reuters.

“The measures to contain the pandemic are more stringent on average in the current quarter than in the previous one,” the Bundesbank explained.  “Therefore, the economic output in the first quarter of 2021 is likely to decline sharply, particularly in the contact-intensive service sectors.”

Market reaction

This report doesn’t seem to be hurting the shared currency. As of writing, the EUR/USD pair was up 0.15% on a daily basis at 1.1919.