The comments from Bundesbank President Joachim Nagel, also a member of the European Central Bank (ECB) Governing Council, released during the European trading session on Wednesday, signaled that he is optimistic on German economic growth in the last quarter this year. However, Nagel warned that the growth won’t be broad-based.

Additional remarks

German recovery stronger than forecast.

Our interim assessments point to a stronger recovery than we were expecting in the summer.

Economic growth is likely to accelerate in the fourth quarter.

However, the recovery is not yet broad-based.

Private consumption remains subdued, and investment in machinery and equipment declined in the second quarter.

Market reaction

There is a sharp sell-off in the Euro (EUR) against the US Dollar (USD)during the release of ECB Nagel’s remarks. However, the decline appears to be the outcome of an upside move in the US Dollar. As of writing, EUR/USD is down 0.15% to near 1.1140.