The Bundesbank, Germany’s Central Bank, said in its monthly report that the German economy is expected to suffer from sharp contraction in the second quarter, despite the ease of closure and restrictions imposed to contain coronavirus.
"Despite the mitigation measures introduced, social and economic life in Germany is still far from what was previously considered normal," the official statement said. "The available economic indicators paint a bleak picture in return."
The official report stated that despite the actions taken, social and economic life in Germany is still far from what it was before the new coronavirus outbreak. The report showed that recent economic data have indicated a marked weakness in business activity.
The financial support plan should be targeted and temporary, and that economic activity in Germany during the second quarter would be much lower than the first quarter.
After first-quarter GDP came in at -2.2% on a quarterly basis, the German central bank said that the second quarter reading was likely to be much worse.
At press time, the EUR/USD pair rose to 1.0836 after erasing
its earlier losses when it dropped to a low of 1.0799.