EUR/USD Dips Below 1.2850 As German Business Confidence Disappoints
- German IFO Business Climate (Sep): 104.7 Actual Vs 105.8 Estimated; 106.3 Prior.
- German IFO Current Assessment (Sep): 110.5 Actual Vs 110.2 Estimated; 111.1 Prior.
- German IFO Current Assessment (Sep): 99.3 Actual Vs 101.2 Estimated; 101.7 Prior.
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The German IFO Business Climate Index came in at 104.7 in September versus 106.3 in August. It is the lowest reading since April 2013 and came short of market expectations of 105.8. Moreover, German IFO Expectations Index showed a print of 99.3 from 101.7 in the previous month. This is the lowest reading since December 2012 and exceedingly missed market forecasts calling for 101.2. Meanwhile, slight improvement in August German IFO Current Assessment Index as it crossed the wires at 110.5 from the consensus of 110.2. The country’s key business sentiment surveys uses 100 as a centerline between positive and negative outlooks. The further north the value is from 100 the stronger the sentiment and vice versa. Number above 100.0 bodes-well for the economy as it may indicate increased consumer spending and economic growth.
It was a very quiet trading session ahead of the data and the Euro continued to trade firmly below 1.2900 level against the US Dollar. Following the release, EUR/USD fell 15 pips lower to trade as low as 1.2849. In addition, German 10-year Government bond advanced with yield dropping 2 basis-points to 0.99 percent.
Looking ahead, US Durable Goods Orders in August is probably the most attention seeking economic release for the remainder of the week. It is expected to cross the wires on Thursday 25th of September at 12:30 GMT. The data displays the value of orders placed for relatively long lasting goods, usually more than three-years, and is a favorable gauge for future US output. It is expected to come in at -18.0 percent in August in comparison to 22.6 percent in July. The prior month’s reading was primarily driven by a surge of orders for civilian aircraft and, therefore, US Durables Ex Transportation would be the more closely watched indicator. This is expected to drop in at 0.60 percent for the month of August.
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Edward Hyon, DailyFX Research Team
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