The majority of the total economic activity of the EU falls on the German economy. Consequently, traders closely monitor the macroeconomic indicators of Germany, which can be judged on the economic climate in the euro area. The European currency gained support amid a recession of recent political instability: Macron won the presidential election in France, which reassured market participants who feared the victory of Le Pen and the probable Frexit. Decisive policy is the key to the strength of the eurozone, but the near future of a single currency will be determined by the economic performance of the EU and its largest member countries. Today, Germany’s fundamental data will come out, which will give the euro a reason to grow or fall depending on the outcome of publications.
The first to be published is the monthly report of the Central Bank of Germany, which will light the traders views of the Bundesbank on the state of the German economy. The report will provide a detailed analysis of current and future economic conditions from the perspective of the bank. If the report comes out optimistic, the demand for euro buying will increase due to the potential economic recovery of Germany and the EU as a whole. The pessimistic tone of the report will lead to the sale of a single currency amid the economic downturn in Germany, which entails an economic downturn in the EU.
Further, Germany’s final GDP (QoQ) will come out with a preliminary forecast of 0.6%, which will be able to judge the rate of growth of the German economy in the last quarter. The indicator measures the value of goods and services produced in the country, taking into account inflation. It is the most complete indicator of economic activity, therefore, it serves as a primary indicator of the country’s economic health. If GDP surpasses expectations, the euro’s rate will rise. GDP below the expected will contribute to the fall of the single currency.