Warning on German Economy Weakens Euro

The euro declined during morning trading in Europe after the German Bundesbank released a statement that it expected the German economy to weaken in the second half of the year. The euro fell by 0.3 percent to 1.4268 as of 11:16 a.m. in London, after earlier appreciating by as much as 0.3 percent. It was 0.4 percent weaker at 116.35 against the yen, after being as high as 117.17.

“Growth is likely to ease somewhat in the foreseeable future,” the Frankfurt-based Bundesbank said in its monthly bulletin published today. The economy’s 1.5 percent growth rate in the first quarter ‘‘considerably overstates the underlying economic momentum. Output growth was clearly lifted during the reporting period by backloading and catching-up effects.’’

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