German economic contraction weighs on EUR
Friday 24 February, 2023
Daily Currency UpdateThe German economy is in the spotlight with the economic data, GDP data and consumer sentiment figures for March in focus. The German economy contracted 0.4% in Q4, down from a prelim 0.2% contraction. In Q3, the economy expanded by 0.5%. Year-over-year, the German economy grew by 0.3% versus 1.3% in Q3. German consumer sentiment figures also disappointed, with the ECB looking for a marked pickup in sentiment to support consumption and the more optimistic economic outlook. The ECB is set on delivering a 50-basis point interest rate hike in March, the latest data releases are unlikely to influence the March monetary policy decision. However, trends will dictate the ECB policy outlook beyond March.
Key MoversThe dollar was set for its fourth straight week of gains as investors braced for U.S. interest rates to be higher for longer. This month, strong U.S. economic data and hawkish rhetoric from Fed officials have resulted in the dollar erasing its year-to-date losses as investors digest the prospect of the Fed staying on its monetary tightening path for longer.
- GBP/USD: 1.1955 - 1.2035 ▼
- GBP/EUR: 1.1325 - 1.1395 ▲
- EUR/USD: 1.0545 - 1.0605 ▼