Germany’s IFO Business Environment Index Shows Unexpected Decline
- Germany’s IFO Business Environment Index disappoints in September.
- EUR/USD continues to drop, falling below 1.1800 following the sentiment data from Germany.
The German IFO Business Environment Index experienced an unexpected drop from 89 in August to 87.7 in September, falling short of market forecasts that anticipated a figure of 89.3.
Additionally, the current economic evaluation index fell to 85.7, down from 86.4 in August, which also missed the expected reading of 86.5.
The IFO Expected Index, a gauge of company forecasts for the next six months, decreased to 89.7, which is down from the expected figure of 91.6.
Reaction to German IFO Data
The EUR/USD faced fresh selling pressures and traded around 1.1780, marking a decline of 0.26% at the time.
Overview of Today’s Euro Price
The euro was notably weaker against the Australian dollar in today’s trading.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.25% | 0.34% | 0.30% | 0.14% | -0.38% | 0.08% | 0.24% | |
| EUR | -0.25% | 0.08% | 0.05% | -0.12% | -0.63% | -0.17% | -0.02% | |
| GBP | -0.34% | -0.08% | -0.04% | -0.20% | -0.65% | -0.26% | -0.14% | |
| JPY | -0.30% | -0.05% | 0.04% | -0.17% | -0.66% | -0.30% | -0.08% | |
| CAD | -0.14% | 0.12% | 0.20% | 0.17% | -0.48% | -0.07% | 0.11% | |
| AUD | 0.38% | 0.63% | 0.65% | 0.66% | 0.48% | 0.46% | 0.63% | |
| NZD | -0.08% | 0.17% | 0.26% | 0.30% | 0.07% | -0.46% | 0.19% | |
| CHF | -0.24% | 0.02% | 0.14% | 0.08% | -0.11% | -0.63% | -0.19% |
This heatmap displays the varying rates of change amongst major currencies. The base currency is to the left and the estimated currency along the top. For example, selecting Euro against USD shows the change rate represented in the relevant box.
This section was originally published as a preview of the German IFO survey.
Overview of the German IFO Survey
The German IFO Institute is set to publish its business research for September at 08:00 GMT on Wednesday. The headline IFO Business Climate Index is projected to rise to 89.3 from the previous figure of 89.0.
The current evaluation index is expected to increase from 86.4 in August to 86.5 in September.
For the IFO Expectation Index, which gauges company forecasts for the following six months, an increase to 92.0 is anticipated, up from 91.6 in August.
Potential Impact on EUR/USD from the German IFO Survey
The EUR/USD might trade negatively as the German IFO business survey approaches. The pair is likely to decline as the US dollar strengthens, following comments from Federal Reserve Chairman Jerome Powell earlier this week.
If the IFO data exceeds expectations, the first resistance level could be around 1.1878, reached on September 16, which might push the euro up. The next significant resistance appears at 1.1918 on September 17, approaching a psychological mark of 1.2000.
On the contrary, a low of 1.1728 on September 19 could provide some support for buyers, though an extended drop might reach the 1.1682 level seen on September 10. Further competition may emerge at the 1.1648 minimum observed on September 5.
