Leading German institutes cut GDP growth forecasts

According to Reuters, Germany’s leading economic institutes downgraded their growth forecasts for Europe’s powerhouse for this year and next, in response to weaker global manufacturing slowdown amid a trade war.

Key Findings:

Now expect the German economy to grow by 0.5% this year and 1.1% in 2020. This compared with their April estimates of 0.8% and 1.8% respectively.

An economic crisis with a pronounced underutilization of the German economy is ... not in sight, although the cyclical downside risks are currently high.

For 2021, the institutes predict a mild recovery with an economic expansion of 1.4%.

The EUR/USD pair is seen fading its recovery momentum and tests the 1.09 handle amid a broad-based US dollar rebound, as the risk-off market profile boosts the safe-haven demand for the buck.