In its monthly report published on Monday, Germany's Bundesbank said that the full-year growth in 2021 is likely to be significantly below the June forecast of 3.7% due to a slowdown in activity in the fourth quarter, as reported by Reuters.

Bundesbank further noted that the momentum in the service sector is expected to slow considerably and added that industrial supply chain issues are forecast to persist.

Regarding price pressures, Bundesbank said it sees inflation continuing to rise for the time being before gradually declining in 2022.

Market reaction

The EUR/USD pair remains on the back foot following this publication and was last seen losing 0.2% on the day at 1.1624.