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The economy is likely to contract 1% in the fourth quarter of 2020, according to the latest report published by Germany’s economic institute DIW on Monday.

Key quotes

“Economy to shrink by even more in Q1 2021.”

“Second hard lockdown in Germany will hit economic output in the winter.”

“Only if the situation stabilizes will the economy return to recovery path in February.”

Market reaction

EUR/USD keeps the offered tone intact below 1.2200, as the US dollar remains strongly in demand amid the new covid strain-induced global markets sell-off.

The spot was last seen trading at 1.2187, losing 0.54% on the day.