Euro Fails to Pop on a Surprise German IFO Survey Amid Risk-Off Markets
THE TAKEAWAY: German IFO Business Climate Survey rises to a 16-month high -> German economy may continue towards a predicted year-end recession -> Euro declines along with equities
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The business climate survey for August was reported at 107.5, beating expectations for 107.0 and higher than 106.2 in July. The IFO expectations survey rose to 103.3 from 102.4, while the current assessment survey rose to 112.0 from 110.1.
The higher business climate supports a Bundesbank prediction for a recovery in the German economy for the rest of the year. The economy expanded by 0.7% in Q2, after unchanged GDP in Q1, but the Bundesbank also warns of a possible slowdown in the current summer. Signs of improved economic performance in the Euro-zone’s biggest economy are Euro positive.
There weren’t any other major releases during the European session. Towards the end of the session, Fed’s Williams and ECB’s Coeure will be speaking in Sweden, possibly triggering EUR/USD volatility in a time when both central banks’ actions are being heavily scrutinized.
The Euro is trading below 1.3350 against the US Dollar at the time of this writing, and the pair may see support around 1.3328, by an upward trend line from July. A six month high at 1.3451 may provide resistance.
EURUSD Daily: August 27, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
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