German Growth Slumps in 2008 on Global Recession

Fundamental Headlines

• Citigroup Ready to Shrink Itself by a Third – Wall Street Journal
• Yahoo Names Bartz as CEO; Decker Resigns – Wall Street Journal
• Barclays to cut 2,100 jobs worldwide – Financial Times
• Deutsche Bank Had Loss of $6.3 Billion in Fourth Quarter – Bloomberg
• China Passes Germany to Become Third-Biggest Economy – Bloomberg

EURUSD – The German 2008 growth report showed that Europe’s largest economy grew at an annual pace of1.3% last year, which was significantly lower that the 2.5% rate of growth in 2007. The breakdown of the report shows a private-sector consumption stagnated during the year, while government spending increased 2.2%. Meanwhile, exports were up 3.9% in 2008, but the rise in foreign demands were outweighed by a 5.2% increase in import. Furthermore, fourth quarter GDP is estimated to contract by 1.5% as fading demands from home and abroad pushed companies to scale back production. Nevertheless, Euro-Zone Industrial production in the Euro-Zone posted its biggest annual decline in 18-years as outputs fell another 1.6% in November, which was followed by a 1.2% contraction in the previous month. As a result, the annual rate slipped to -7.7% from -5.7% in October. The breakdown of the report showed that production of intermediate goods fell 2.8% during the month, which was followed by a 1.8% decline in capital goods. The data continues to reflect a dour outlook for the 16 economies operation under the euro, and conditions are likely to get worse as growth prospects for Europe’s largest economy deteriorates at a rapid pace. Discuss the topic and your trade ideas in the EUR/USD Forum.