Euro down after German GDP downgrade

<p>The euro was driven down after Germany’s GDP slowed.</p>

The euro was down in early forex trading this morning (November 23rd) as Germany's gross domestic product (GDP) slowed to 0.2 per cent.

Data released by the Federal Statistics Office today confirmed the body's initial estimate that the figure would drop by 0.1 per cent during the three months to September 2012.

Despite holding up well during the eurozone crisis, Germany's economic situation has worsened as a negative outlook drives companies to hold off on investing.

Analysts have also forecast further contraction during the fourth quarter of 2012, but stated that the eurozone's largest economy will avoid falling into recession.

FSO breakdown figures also showed German exports increased in the third quarter, rising by 1.4 per cent, while government spending advanced by 0.4 per cent.

Holger Schmieding of Berenberg Bank told Reuters: "Businesses are investing less in machines and other equipment. The only explanation for that is a crisis of confidence – which means the German economy will lose more speed."

Find out about sterling and forex trading at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.