That headline likely explains the recent drop to 1.2965 in EUR/USD. Reuters says one of the German papers reports that the Germans see their economy contracting 6% in 2009 (though talk of that magnitude apparently circulated late last week.) A new government forecast is expected tomorrow.
EUR/USD is on the mend, now at 1.3015; Offers begin at 1.3050 and extend to 1.3050. Buy stops are seen at 1.3055.