German economy grows strongly in Q2, driven by domestic demand

The German second quarter economic growth data released earlier on Friday showed that the German economy is in excellent shape and well-placed to withstand any negative shocks in the near-term. The figures confirmed growth of 0.6 percent sequentially and 2.1 percent year-on-year, the most solid annual rate in over three years.

Once again, the economic growth was driven by domestic demand, with fixed investment growing for a third straight quarter and at a healthy 1 percent sequentially, and private consumption rose 0.8 percent sequentially, the most in six years. In contrast, net trade contributed negatively to GDP growth for the third quarter in the past four.

But while government consumption also made positive contribution in the second quarter, it remained in line with typical German fiscal prudence, noted Daiwa Capital Markets Research. Other data released today reporting a general government fiscal surplus of 1.1 percent of GDP in the first half of 2017, as tax revenues continued to outpace public spending.

At 21:00 GMT the FxWirePro's Hourly Strength Index of Euro was highly bullish at 120.681, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -46.9752. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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