German economy likely to expand 2.5 pct in 2018 - Commerzbank

The German Federal Statistical Office had indicated that the German economy expanded by a good 0.5 percent in the fourth quarter on a sequential basis. Thus, the starting point for 2018 continues to be quite robust, noted Commerzbank in a research report. The German economy is expected to expand 2.5 percent in 2018; however, the solid economic growth and high tax revenues are alluring, stated Commerzbank.

The Ifo business climate index is higher than it was during the German reunification boom. Order intake has increased sharply in the past few months.

In this environment, Germany appears to be economically omnipotent, stated Commerzbank. But this is alluring as it not only tempts politicians to test the stress limits of the economy, for instance by rolling back Chancellor Schröder’s labour market reforms or considering tax rises but also results in a situation where more and more German politicians are apparently willing to take on the plans of the French president to convert the Monetary Union further into a transfer union, for example through a common budget.

At 13:00 GMT the FxWirePro's Hourly Strength Index of Euro was highly bullish 111.567, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -62.6164. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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