Economic activity in Germany increased 0.5% in the third quarter after expanding 0.3% during the three-months through June as households and businesses increased their rate of consumption. As the fundamental outlook for the euro-area improves, the European Central Bank may see scope to normalize monetary policy further, and the Governing Council may continue to strike a hawkish tone for monetary policy as the rise in growth heightens the prospects for inflation. Although the GDP report came out in line with market expectations, the initial reaction to the release was short-lived, and the EUR/USD continued to lose ground throughout the North American trade as the exchange rate settled at 1.3538 at the end of the day.
