The major currency pair is growing a little bit in the middle of the week, but the numbers from Germany make investors cautious.
EURUSD is trading upwards on Wednesday morning, but the future outlook is not so bright. The current quote for the instrument is 1.1460.
Investors’ attention is now focused on Germany, which published rather disappointing numbers on the Industrial Production yesterday. The report showed -1.9% m/m in November after -0.8% m/m in the previous month. Investors expected the indicator to recover by 0.3% m/m, but it didn’t happen. In general, the Industrial Production has been falling for the third consecutive month and that becomes a real concern.
The major components that failed were consumer (-4.1%), capital (-1.8%), and intermediate goods (-1.0%), as well as energy production (-3.1%) and construction activity (-1.7%). These numbers once again raised speculations about possible economic stagnation in Germany.
In this light, it will be very interesting to read the preliminary report on the German GDP in the fourth quarter 2018 to be published next week. Taking into account that the country’s economy lost 0.2% q/q in the third quarter, the actual number may be an unpleasant surprise. If the GDP report shows another decline, the German economy might be officially described as “economic recession”.
The country’s economy is slowed down by reduction in the world trade volume, which is very unlikely to have decreased in the fourth quarter. The Industrial Production decline is surely to ratchet up pressure, so the Euro may probably be very sensitive to such negative news.