German businesses are less confident. IFO’s business climate fell to 107.3 points, business expectations to 102.4 and the current assessment to 112.5, all below expectations. They were also accompanied by small downwards revisions. This reflects a damper mood.
EUR/USD is a bit off the highs but as in previous days, the impact of indicators is slightly weaker than market moods.
Things to consider for German businesses are: the Chinese slowdown, ECB policy amid falling prices, the handling of refugees and the fallout from the VW crisis.
Germany’s No. 1 Think Tank, IFO was expected to report a small drop in Business Climate: from 108.7 to 108.4 points for January. The Business Expectations component was predicted to slide from 104.7 to 104.1 and the Current Assessment one to remain unchanged at 112.8 points.
EUR/USD was trading around 1.0825, slightly higher in range.
The euro weakened last week after Draghi made it clear that the ECB is ready to act. Compounded with a better market mood, there is less demand for safe haven euros.
More: EUR: Hedge Downside, GBP: Correction Ahead – Barclays
