Economy on track for stronger growth in Q3

German Finance Ministry said in a monthly report on Friday, per Reuters, that the economy is on track for a lasting, probably stronger recovery in the third quarter driven by lively domestic demand after gross domestic product expanded by 1.5% on the quarter from April to June.

Key quotes

Sentiment surveys and forward-looking indicators such as truck toll mileage pointed to ‘unbroken optimism’ among businesses and high activity in the economy over the summer months.

The re-opening of the economy and falling COVID-19 cases in early summer have pushed up household spending which translated into booming retail sales in May and June.

The economic recovery has also lifted tax revenues, though accumulated tax revenues from January to July are still 1.7% lower compared to the same period in the pre-pandemic year of 2019.

FX reaction

Given early Asia’s inactive markets, EUR/USD paid a little heed to the upbeat news and remains pressured near a yearly low of 1.1665 by the press time.

Read: EUR/USD consolidates daily losses, looks to close below 1,1700

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