German Business Confidence Improves but Provides Little EUR Support

It was a relatively quiet day on the Eurozone economic calendar. German business sentiment figures were on focus early in the European session.

In January, Germany’s Ifo Business Climate Index climbed from 94.8 to 95.7 Economists had forecast a decline to 94.7. The Business Expectations Index rose from 92.7 to 95.2, while the Current Assessment Index slipped from 96.9 to 96.1.

According to the January survey,

• In manufacturing, the index saw a sharp increase. Companies were both more satisfied with the current business and also more optimistic about the months ahead.
• Service sector firms also saw a pickup in business sentiment. While firms were no longer pessimistic, service providers were less satisfied with their current situation.
• In trade, the business climate also improved. Expectations improved noticeably, while sentiment towards the current situation worsened.

Market Impact

Ahead of today’s stats, the EUR had risen to a pre-stat and current day high $1.13288 before hitting reverse.

In response to today’s stats, the EUR rose to a post-stat high $1.13002 before sliding to a post-stat and current day low $1.12800.

At the time of writing, the EUR was down by 0.40% to $1.12809

Next Up

Consumer confidence and house price figures from the U.S. With the FOMC monetary policy meeting getting under way shortly, the consumer confidence figure will be the key stat. With elevated inflation, however, weak numbers are unlikely to deter the FED from action.