The first figures of German GDP for the second quarter considerable drop in production due to the coronavirus crisis. In addition to a certain strength in the dollar, the EUR / USD has more room to fall than to climb, reports FXStreet analyst Yohay Elam.
“Economists expect the largest economy in the old continent to drop GDP by 2.2% in the first quarter of 2020, the worst since the first quarter of 2009 – the worst of the financial crisis.”
“EUR / USD has tipped down, and this trend could continue if German GDP does not meet expectations. The combination of weak euro area data and a stronger dollar could push the EUR / USD down. “
“If German GDP meets expectations, it would be encouraging for the euro region, because the largest country would have posted better figures than the other major economies and the bloc as a whole. However, the strength of the USD is likely to prevent the EUR / USD from advancing. “
“The currency pair only has room to rise in the unlikely scenario of an upward beat, preferably a contraction of less than 2%. A surprising result would stimulate the EUR / USD, at least temporarily. “