While Germany’s Q3 GDP increase of 0.8% over Q2 beat expectations by 0.2% bumped the euro up towards 1.17 USD per EUR, this has come at a cost. European Central Bank Vice President Vitor Constancio congratulated himself on Monday, stating that the ECB monetary policy was highly successful. Yeah, right: after injecting more than €2 trillion in the economy! And even so, the Eurozone is still flirting with deflation.
The German economy is strong. Performance has been positive since Q2 2014, with growth mostly driven by exports. The euro’s weakness since the start of the year has definitely helped. Only strong inflation will help the ECB for now.
By Yann Quelenn