EUR/USD is hardly moving up despite upbeat figures from Germany. The German Ifo Business Climate dropped to 107.5 points, higher than 107 that was expected. Also the other figures provided by Ifo were better than predicted. Current Assessment is at 117.9 points and expectations were at 98 points.
Euro/dollar moved up to almost 1.3450, moving up from before the release and escaping the 8 month low earlier. Greece still looms of the common currency, and it dropped back to under 1.3420.
The headline figure, Business Climate, dropped from 108.7 points last month. The current assessment for September was predicted to ease from 118.1 to 115.5 points and the IFO expectations were estimated to drop from 1001. to 97.4 points.
The numbers provided by IFO are highly regarded and have a strong influence on the euro. This is Germany’s no.1 think tank. While the numbers are better than expected, the head of Ifo says that firms are skeptical about the future. This doesn’t help the euro.
Up to the recent crisis, the survey had a tendency of exceeding expectations and being relatively positive. This changed since July = the main figure, Business Climate disappointed with a drop to 112.9 points, and accelerated in August when this survey of 7000 businesses fell deeper to 108.7 points.
EUR/USD started the week without a dramatic gap like last time, and after some range trading, it dropped to a new 8 month low at 1.3362. The pair bounced back nicely towards the release.
For more on the euro, see the euro to dollar forecast.
The euro was hit by the inability of European leaders to find a plausible solution for Greece during the weekend. They are pressured to accept a Greek default within 6 weeks.
There are also other proposals, such as leveraging the EFSF (bailout fund.
