It’s been a relatively quiet week for EUR/USD, and pair is unchanged on Thursday. Currently, the pair is trading at 1.1343, up 0.08% on the day. In economic news, German data continued to disappoint. Final GDP for the fourth quarter came in at 0.0%, matching the forecast. Ifo Business Climate dropped to 98.5, shy of the estimate of 99.0 points. In the eurozone, inflation dipped to 1.4%, slowing down for a third straight month. In the U.S., there are no data releases, but we’ll hear from a host of FOMC members, with the markets hoping for some insights into future monetary policy.

It has been a dismal week for German numbers, but nonetheless the euro has managed to hold its own against the dollar. On Friday, fourth-quarter GDP showed no change, after a contraction of 0.2% in the third quarter. The Ifo Business Climate survey slowed for a sixth successive month, indicating concern in the business sector about the country’s economic outlook. German manufacturing PMI contracted for a second straight month, while German declined in January for the first time in a year. As the largest economy in the eurozone, Germany is the bellwether for the entire eurozone, and if German data continues to miss expectations, the euro could find itself under pressure.

The Federal Reserve minutes from the January meeting indicated that policymakers remain dovish with regard to monetary policy. Investors were not surprised, and gold was unable to make any headway. Participants reiterated that the Fed will remain cautious, stating that a “patient approach to monetary policy” was appropriate. However, members added that if economic projections improved, the Fed could revise the “patient approach”. The minutes noted that the employment market had strengthened and economic activity was rising, but expected GDP in 2019 to slow down compared to 2018. We may not see a rate hike before the second half of the year, as the Fed has scaled back its forecast to two hikes this year, while the markets have priced in no rates hikes until 2020.

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