The German economy grew at a slower than expected pace in the fourth quarter of 2003, as the rising euro curbed demand for exports. German GDP rose a seasonally- and calendar-adjusted 0.2pc in the quarter from the previous three months and was up 0.2pc year-on-year, according to preliminary data from the Federal Statistics Office. Economists had forecast a 0.3pc rise quarter-on-quarter and a 0.1pc rise year-on-year. The statistics office said the improvement in the fourth quarter over the third quarter was driven by a relatively strong rise in domestic activity. The export surplus - net exports - however, was on the decrease, since imports grew "markedly faster" compared with the preceding quarter than exports, it added.
The euro has risen 9pc in the past three months and 17pc in the past six months against the dollar, making exports from countries such as Germany, Ireland and France more expensive outside the eurozone. This morning, the euro is trading at a four-week high of USD1.210 after it rose overnight after Federal Reserve chairman Alan Greenspan said last night that the Fed would remain "patient" before raising interest rates///www.fxcentre.com