Leader Online: Germany, the largest economy in Europe and the fourth largest in the world, has been confirmed to be in recession (Germany recession 2023). As a result, the euro, the official currency of the European Union, fell on Thursday. Meanwhile, the dollar (US dollar index) strengthened to a two-month high as demand for safe-haven assets increased amid concerns about a US default.
Germany’s GDP shrank by 0.3 percent in the first quarter of this year, according to quarterly data released by Germany’s statistics office. In the fourth quarter of 2022, i.e. between October and December, Germany’s GDP contracted by 0.5 percent. (Germany economy enters recession)
Rating agency Fitch’s latest rating has raised concerns. In which the US’s “AAA” credit rating has been placed in the negative watch category. These are indications of possible outcomes as the government and the opposition failed to agree on raising the US debt ceiling. (Germany news)
US dollar benefited from safe haven demand. In the US, the government and opposition parties must agree on raising the debt ceiling before a certain date. Interestingly, the US Treasury has told the government that it no longer has enough cash left to pay its bills.
Stefan Melin, senior analyst at Danske Bank, said efforts to reduce risk this week have helped the dollar. Meanwhile, the euro has fallen to lows against the dollar as the economy in Europe collapses. There are signs from Germany that Europe’s economy is weakening. Where the economy has slowed slightly in the first quarter. After negative growth in the fourth quarter of fiscal 2022, Germany’s economy has tipped into recession. (Germany recession 2023)
“We’ve seen some mixed cross-Atlantic macro data this week. This shows that the German economy is slowing down,” said Danske Bank’s Melin.
The euro fell about 0.2 percent. The euro fell to $1.0715 ($1.0715) against the dollar. This is a two-month low for the euro. The US dollar has strengthened this year due to the prospect of a rate cut by the Federal Reserve. (Germany recession 2023)
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