The German economy is expected to contract again in the first quarter of the year, Germany's central bank, Bundesbank, noted in its monthly report on Monday, as reported by Reuters.

"Unlike in previous waves of the pandemic it is not just activity in the services sector that is likely affected by containment measures and behavioural changes," Bundesbank explained in its publication. "Instead, pandemic-related absence from work is likely to dampen economic activity markedly also in other sectors."

Market reaction

The EUR/USD pair showed no immediate reaction to this headline and was last seen trading at 1.1360, where it was up 0.35% on a daily basis.