• German economic activity contracted in the last quarter of the year.
• EUR/USD clings to modest daily gains, trades below 1.0900.

The preliminary data published by Germany's Destatis revealed on Monday that the German economy contracted by 0.2% on a quarterly basis in the second quarter. At an annualized rate, the Gross Domestic Product grew 1.1%, down from 1.3% recorded in the third quarter, and missed the market expectation of 1.3%.

"After the German economy managed to perform well despite difficult conditions in the first three quarters, economic performance slightly decreased in the fourth quarter of 2022", Destatis noted in its publication. "Especially the price, seasonally and calendar adjusted private consumption expenditure, which had supported the German economy in the first three quarters, was lower than in the previous quarter."

Market reaction

EUR/USD showed no immediate reaction and was last seen posting modest daily gains on the day at around 1.0880.