Business confidence falls more than expected in Germany, according to IFO: 106.3 points in the headline figure, 111.1 points in the current assessment and 101.7 in the Expectations component. This follows the trend of below expectations figures.
EUR/USD dips to a new low at 1.3183, but continues hesitating ahead of support.
Update: after the initial dip, the pair bounces back, but is still unable to recapture 1.32.
The German Ifo Business Climate for August was expected to continue sliding, to 107.1 points this time after 108 in July. The Current Assessment component was expected to drop from 112.9 to 112 points. The Expectations figures carried prediction of a fall from 103.4 to 102 points.
Before the release, EUR/USD has been on the fall, starting the week with a Sunday gap under 1.32
The ongoing tensions with Russia have weighed on business sentiment in Germany, alongside other worries about Chinese growth and deflation in the euro-zone.
The other major business survey, ZEW, also showed similar results. In the second quarter the German economy contracted. However, many expect it to rebound in Q3.
EUR/USD continued falling, losing the 1.32 level and creeping towards low support at 1.3175. The latest move down was mostly inspired by the greenback’s strength, but this wasn’t the only reason.
1.3175 serves as minor support, followed by 1.3175. 1.3220 is resistance, and the gap that needs to be closed. For more, see the EUR/USD forecast.