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German economy grows strongly in Q2 on domestic demand, likely to grow 2 pct in 2017

The German economy grew again in the second quarter of this year. The GDP grew 0.6 percent quarter-on-quarter, mainly driven by the domestic demand. According to a Nordea Bank research report, the economic outlook of Germany continues to be positive.

The official statistical office showed that private and public consumption, along with capital spending mainly drove the economic growth. Meanwhile, net exports weighed on the growth, in contrast to the first quarter of this year. The economic growth of the first quarter was upwardly revised to 0.7 percent sequentially from 0.6 percent. Overall, the first half of the year was solid and evidently above trend growth that should be about 1.25 percent. According to Nordea Bank, the German economy is expected to expand 2 percent in the whole of 2017.

The German economy is booming and forward-looking indicators area might be pointing to some deceleration ahead; however, not to a significant one. Additional companies are reporting that finding skilled labor becomes more difficult. Wage growth continues to be moderate; however, it might increase in the quarters ahead, reflecting a tightening labor market.

On a year-on-year basis, the German economy expanded 0.8 percent in the second quarter of 2017.

At 21:00 GMT the FxWirePro's Hourly Strength Index of Euro was neutral at 38.6835, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 118.572. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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