"German economic activity will probably fall again in the current quarter," Germany's Bundesbank said in its monthly reported published on Monday, per Reuters. "However, the decline is likely to be less than in the final quarter of 2022."

The Bundesbank further noted that overall inflation is forecast to decline in March with higher energy prices from a year earlier being eliminated from the annual rate. "That being said, the core rate is proving exceptionally persistent," the bank explained. "It could even increase slightly towards the middle of the year."

Market reaction

EUR/USD clings to modest daily gains at around 1.0700 following this publication.