The euro traded lower on Friday (Feb. 14), dropping to the lowest level against the dollar since May 2017, extending its recent losses, following the release of Germany’s underwhelming growth figures.
The single currency lost 0.04% against the greenback to sell for 1.08376 at 9:37 am CET and it was down 0.05% compared to the British pound to go for 0.83043 at the same time.
Preliminary figures from Destatis, Germany's statistical office, showed earlier in the day that
Europe's largest economy stagnated in the fourth quarter of 2019 amid slower consumption and weaker exports.
The country's gross domestic product remained flat at 0.0% compared with the previous quarter.
Economists had forecast 0.1% growth. The report also noted that German exports declined slightly in the last three months of 2019 quarter on quarter, while imports rose.
(Graph source: Destatis)
Meanwhile, Eurozone growth hit seven-year low, Eurostat data showed.
Seasonally adjusted GDP rose by 0.1% in both the eurozone and the EU during the fourth quarter of 2019, compared with the previous quarter, according to a flash estimate published by the statistical office of the European Union. That’s down from 0.3% growth across Europe in July-September.
On an annual basis, the eurozone only grew by 1.2% in 2019 while the EU expanded by 1.4%
Here’s how some EU members performed:
Romania: +1.5% quarter-on-quarter in October-December 2019
Belgium: + 0.4%
Germany: no growth
And here's how some non-EU members performed:
US: + 0.5%
China: +1.5% growth quarter-on-quarter
Carsten Brzeski, ING economist warns the end to Germany's stagnation is not yet in sight as the risk of a full-blown recession is hanging over the country.
Discussions on the German economy will again be dominated by one single letter: the ‘r’. he writes.
“Even though there had been several one-offs, explaining the short-term weakness, the bigger picture of the German economy is clear: it has been in a de facto stagnation since the summer of 2018.In particular, the manufacturing sector remains caught between cyclical weakness, on the back of the trade conflict and weaker global growth, and structural weakness, on the back of disruption in the automotive sector and too little investment.”
2019 was not a good year for Europe’s largest economy which struggles to handle trade tensions, changes in the auto industry. Now the coronavirus outbreak could cause more economic damage.