EUR Strength Confirmed by Strong German Business Backdrop
- Ifo expectations and business climate data beat already lofty levels.
- Germany’s biggest opposition party is open to talks with German Chancellor Angela Merkel.
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The latest Ifo expectations and business climate data continued to show the German economy on a strong footing. The data are seen as an early indicator of economic developments in Germany. November’s business climate rose to a new record high of 117.5 from a prior 116.7 and expectations of 116.5, while business expectations rose to 111.0 from 109.1 trumping expectations of 108.8. The current expectations however slipped a touch lower to 124.4 from 124.8 and expectations of 125.
The institute sees Germany’s economy growing by 0.7% in Q4 and by 2.3% in 2017.
The Euro continued to firm on the release, building on its recent gains, especially against a weak US Dollar. EUR/USD hit a six-week high of 1.18755 and is within touching distance of levels not seen since September 25.
Germany’s political logjam may also ease in the near future, removing a potential sticking point for the single currency. In the latest developments, the Social Democrats, Germany’s largest opposition party, said that they would be open to talks with Angela Merkel’s government in an effort to bring political stability to the country. The SDP who originally refused to re-join a coalition government has indicated that they party are not closed to talks, although it is not clear if the SDP is ready to discuss entering government or whether it will pledge its support to the government.
Chart: EURUSD Daily Time frame (August - November 24, 2017)
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--- Written by Nick Cawley, Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.