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Euro Strong After German Business Climate Jumps Sharply

The euro was strong against most other currencies today except for the top performers — the Australian and New Zealand dollars. Macroeconomic data released in the eurozone today was good but it does not seem to be the major reason for th…

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The euro was strong against most other currencies today except for the top performers — the Australian and New Zealand dollars. Macroeconomic data released in the eurozone today was good but it does not seem to be the major reason for the currency’s decent performance.

The German Ifo Business Climate Index climbed sharply from 90.3 in January to 92.4 in February on a seasonally adjusted basis. Experts had predicted ahead of the report just a marginal increase to 90.5. The report commented on the result:

Sentiment among managers in Germany has improved noticeably.

It added further:

Assessments of the current business situation were more positive. Moreover, pessimism regarding the coming months was markedly reduced. The German economy is proving robust despite the lockdown, especially thanks to strength in industry.

All the business climate sub-indices improved, with the manufacturing index climbing to the highest level since November 2018. The assessment of the current situation was less positive, with some sectors continuing to experience difficulties.

Now, traders wait for tomorrow’s release of final estimates of inflation data for January. Analysts predicted that both headline and underline inflation will remain unrevised from the preliminary positive readings.

EUR/USD rallied from 1.2113 to 1.2144 as of 14:26 GMT today, bouncing from the daily low of 1.2091. EUR/GBP gained from 0.8641 to 0.8653. EUR/JPY rose from the opening of 127.60 to 127.95 but retreated from the session maximum of 128.25.


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