Euro Rallies on Surprising German Business Survey
THE TAKEAWAY: German IFO business climate survey beats expectations at 105.7 -> IFO’s Wahlrobe says he expects GDP to rise significantly in Q2 -> Euro rallies closer to 1.3000
The Euro rallied fifty points and rose closer to 1.3000 against the US Dollar, following the release of a better than expected German IFO survey and ensuing optimistic comments from the IFO. The IFO Survey of the business climate in May rose to 105.7, beating expectations for the survey result to remain at 104.4 for a second month. The IFO survey of current assessment rose to 110.0 from 107.2 in April, and the survey of expectations met expectations and remained at 101.6.
IFO’s Wohlrabe said after the release that he expects the German GDP to rise significantly in the second quarter when compared to the first quarter. Earlier today, the German economy was confirmed to have grown 0.1% in Q1, following the 0.7% GDP decline reported for Q4. The German GFK consumer confidence survey also rose more than expected to 6.5 for June.
The Euro is trading around 1.2980 against the US Dollar in Forex markets at the time of this writing. The pair may see resistance by the key 1.3000 figure, and support may continue to be provided around 1.2815.
The major comments from the European session came from the Bank of England’s Fisher. Fisher said the UK is starting to see a pickup, but the central bank must continue to support adjustments in the economy. He further said that evidence shows that QE is not becoming less effective. Although Fisher’s comments came off as dovish, he was one of the three MPC members who voted to add to stimulus in May, and therefore his comments did not significantly affect Pound trading.
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EURUSDDaily: May 24, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to bbspier@fxcm.com .
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