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Germany, Europe’s largest economy probably contracted by 3% in the January to March period, the latest forecasts published by Germany’s economic institute DIW showed on Wednesday.

Key quotes

“Sees Q1 German GDP down 3% QoQ.”

“Sees Q4 German GDP unchanged QoQ.”

“Lockdown measures are gradually impacting the industry as well.”

Market reaction

EUR/USD remains under heavy selling pressure near-daily lows of 1.2120 after the ECB policymaker Klaas Knot said that the ECB is prepared to counter the appreciation of the euro.

The spot quickly eroded over 30-pips on his comments, having faced rejection at 1.2150.