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German GDP In Line, Euro Slightly Higher

Last updated 1/11/2012 4:07 AM ET (GMT -5) 0 Comments - Add your comment

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Boris Schlossberg

Director of Currency Research, GFT

German GDP for 2011 grew at 3% as expected as Europe’s largest economy was able to shrug off the sovereign debt crisis in the region. The growth rate was slower than 3.7% recorded the year prior but was nevertheless right in line with analyst forecasts.

Private consumption and strong export growth helped to drive German expansion in 2011. Exports increased at an impressive 8.2% rate but this was still markedly less than the 13.7% growth in 2010. Overall the data for 2011 shows that German economic recovery continues to broaden and the latest employment data  indicates that the expansion remains on track.

Going forward, analysts are much less optimistic about the prospects for 2012 with several market players calling for German to GDP to expand at a meager 0.6% in the wake of the turmoil plaguing the EZ sovereign credit markets. For now however there is little evidence to suggest that German growth will contract so sharply, and if the credit markets in the region stabilize, the German economy could surprise to the upside helping to lift the performance of EZ as a whole.

The EUR/USD saw little immediate reaction to the news release but ticked higher at the start of European open trade boosted by demand from Middle East. With economic calendar very quiet today, price action in the capital markets has been subdued, but all eyes will turn to the 5 year German bund auction due at 10:30 GMT

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About The Author

Boris Schlossberg began his Wall Street trading career more than 20 years ago at Drexel Burhnam Lambert. There, he traded nearly every type of financial product on the market in the U.S., from equities and options to stock index futures and foreign exchange. His innate ability to analyze market information and use it to trade has helped him become an industry-recognized, “go to” trading professional.

These days, whenever the markets move, many organizations turn to Schlossberg for his take on the situation. He is a weekly contributor to CNBC's Squawk Box and a regular commentator for Bloomberg radio and television. His daily currency research is widely quoted by Reuters, Dow Jones and Agence France Presse newswires and appears in numerous newspapers worldwide. Schlossberg has written for publications like SFO magazine, Active Trader and Technical Analysis of Stocks and Commodities. He is also the author of Technical Analysis of the Currency Market and the co-author of Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game with Kathy Lien. He joined GFT in 2008.