In its recently published annual economic report, Germany's economy ministry said that they lowered the 2022 GDP growth forecast to 3.6% from the October estimate of 4.1%, as reported by Reuters.

Additional takeaways

"German government expects 2022 GDP growth to be solely driven by domestic demand, local investments."

"German government expects consumer price inflation to accelerate to 3.3% in 2022 from 3.1% in 2021."

"German government expects higher wage demands in 2022 but sees no signs of wage-price-spiral so far."

Market reaction

The EUR/USD pair continues to edge lower during the European trading hours and was last seen losing 0.17% on the day at 1.1280.