Release Explanation: It measures the monetary value of all goods and services produced within a Country’s borders in a specific time period. GDP is calculated on an annual basis, is the broadest measure of activity, and the primary gauge of each economy’s overall health. It includes all Company and Personal consumption, government outlays, investments, and exports less imports, that occur within a defined territory.

Trade Desk Thoughts: The Euro-area GDP release showed that the economy contracted in the fourth quarter 1.5%. Q4 was the third consecutive quarter in which the economy contracted.

Compared with the fourth quarter of 2007, the Euro-area GDP fell by 1.3%. Taken individually, the biggest economies from the Euro-area declined at a record pace in the last quarter. Germany, France, Italy and Portugal saw the biggest declines in the last two decades, in the fourth quarter. Out of the 15 countries that form the Euro-area, Greece and Cyprus were the only two countries that reported growth in Q4 2008

All the major components that make up the GDP number declined in the fourth quarter. Household consumption expenditure declined by 0.9%, investments fell by 2.7%, while exports and imports decreased by 7.3% and by 5.5% respectively.

Forex Technical Reaction: The release did not spark any reaction in the currency market as traders are focused on the ECB rate decision. Since the overnight session started, the euro fell 80 pips.