More Money Means More Confidence for German Consumers
THE TAKEAWAY: German consumer confidence rises to 5.9 for August, beats expectations -> Higher wages outweigh concerns over Euro-zone -> Euro trading near weekly highs
Projected German consumer confidence for the month of August is higher according to a survey conducted by GFK. The survey result was 5.9, higher than the previous month’s 5.8 result and beating analysts’ expectations for an unchanged consumer confidence. Any survey result above 0.0 indicates increasing consumer confidence.
The positive survey was attributed to higher wages, which are outweighing consumers’ concerns with the Euro-debt crisis. This comes as a relief from the wave of negative economic news from Germany; just yesterday German business confidence fell to a 2-year low according to an IFO survey.
The Euro reached a week-long high yesterday against the US Dollar, as the European Central Bank’s Nowotny’s comments about considering a banking license for the ESM bailout fund, sent the pair 70 points higher to 1.2150. The Euro only slightly reacted to the better than expected consumer confidence survey, climbing 10 points above the 1.2143 support-turned-resistance line from 2010. The 1.2143 line could now provide support and there doesn’t seem to be a strong resistance before 1.2200.
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