THE TAKEAWAY: IFO business climate survey falls to 106.7 in March, following a 10-month high -> Bundesbank predicts economic growth in the current quarter -> Euro trading remains focused on Cyprus
The IFO German business climate survey declined for the first time in five months in March, after reaching a 10-month high in February. The business climate survey was reported at 106.7, disappointing expectations for 107.8 and down from 107.4 in the previous month. The IFO current assessment survey unexpectedly fell to 109.9 from 100.2 in February, and the IFO expectations survey fell to 103.6 from 104.6.
The results are based on IFO surveys of German firms, and the main business climate survey has not fallen below the neutral 100.0 point in three years.
The German economy is the Euro-zone’s biggest economy, and also one of the best performers through the Euro-zone debt crisis. The German GDP declined 0.6% in Q4, but the Bundesbank has predicted the country will see economic growth in the current quarter. Signs of further weakness in German economic growth are Euro negative.
That is why the Euro declined nearly twenty points and below 1.2900 against the US Dollar following the disappointing release. However, the Euro has recovered all those losses, as single currency traders remained focused on the Cyprus crisis. EUR/USD may now be seeing resistance at 1.2920, by a long term downward trend line from November 2011. A 200 day moving average may provide support around 1.2870.
EURUSD Daily: March 22, 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 .