EUR/USD is showing little movement in the Wednesday session. Currently, the pair is trading at 1.1283, down 0.09% on the day. On the release front, German GfK consumer climate dipped to 10.4 points, shy of the estimate of 10.5 points. In the U.S., the key event is Preliminary GDP, with an estimate of 3.6%. On Thursday, German Preliminary CPI is expected to remain at 0.2%. As well, Germany releases unemployment change and the ECB will publish its financial stability review. The U.S. releases Core PCE Price Index, personal spending and unemployment claims. As well, the FOMC releases the minutes of its November policy meeting.
Is the German economy in trouble? Confidence indicators are down in November, raising concerns about the strength of the economy. GfK consumer climate dropped to 10.4 points, its weakest level since May 2017. Earlier in the week, Ifo Business Climate dropped to 102.3, missing the forecast of 102.0 points. This marked a 4-month low. The ongoing U.S-China trade war has hurt the German export sector, as German companies that export to both the U.S. and China are now facing higher tariffs. Germany’s economy posted a rare decline in the third quarter, with a contraction of 0.2%. Another problem is lower eurozone growth, as weak economic activity in the third quarter appears to be the story in the fourth quarter. As well, the looming departure of Britain from the European Union and the crisis over the Italian budget have weighed on business and consumer confidence levels in German.
