German Ifo Business Climate came out better than expected, rising above 100 for the first time since May 2008, and helps the Euro temporarily recover from the Greek tragedies.
Similar to the ZEW index earlier in the week, Germany’s Ifo Business Climate was expected to rise from 98.1 to 98.9, but instead of edging up, it jumped to 101.6 points. This survey of 7,000 was always more positive than other European indicators, but this jump sure helps. This adds to previous European figures.
Te ZEW Economic Sentiment, that dropped in the past 6 months and hurt the Euro each time, finally rose, and did it in an impressing way – from 45. 2 to 53 points. This is an important indicator.
Apart from ZEW, also Europe’s Current Account came out better than expected, and also German PPI indicated a rise in prices. Earlier today, French consumer spending also rose more than expected – 1.2% – triple the early expectations.
Today’s indicators sent the Euro above 1.3267 once again, retracing the losses made earlier. The losses were heavy.
Greece suffered another downgrade – this time from Moody’s. There is more talk about contagion – spreading the Greek troubles to other vulnerable nations in Europe, and the talks about a Greek default are also becoming louder. This sent EUR/USD below 1.3267 during the Asian session, down to 1.3201 – a new year-to-date low.
I’ve asked if the good European indicators are enough for enough to counter the Greek troubles. Despite this recovery now, the answer, in general, is NO. The drops that EUR/USD suffers after any bit of bad Greek news are stronger than the recovery moves that the Euro enjoys after every good economic indicator.
The next level for EUR/USD is 1.3080, the jumping point for the the pair’s long term rally in 2009. Fresh worries will send the pair towards that line. Looking up, the next resistance line is at 1.3380, but after the recent drops, the Euro has a long way to go.
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