THE TAKEAWAY: German IFO business climate rises to 107.4 in February -> Highest survey in ten months supports Bundesbank expectations for growth -> Euro gains temporarily
The IFO survey of the German business climate reached a ten month high in February, confirming expectations for an upturn in economic growth. The business climate survey was reported at 107.4, better than expectations for 104.9 and higher than January’s revised 104.3 survey result. The survey for current assessment rose from 108.1 to 110.2 in February, and the survey for expectations rose to 104.6 from 100.6, according to the IFO Institute.
The assessment is based on surveys with German businesses, and any survey result above 100.0 is positive.
The higher survey seems to confirm the Bundesbank’s recent prediction that the German economy will return to growth in the current quarter on improved industrial production, and the central bank further said that a gradual recovery is likely for the rest of the year. However, the German economy contracted 0.6% in Q4, as was confirmed in a final estimate earlier today.
Signs of German economic growth are Euro positive, which is why the Euro rose slightly following the IFO release. However, the gains were quickly unwound, and EUR/USD is currently trading around 1.3220 in Forex markets. The pair may see resistance by a broken support around 1.3284. Support might be provided at 1.3184, by the first support given by the monthly pivot indicator.
EURUSD Daily: February 22, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to instructor@dailyfx.com .
