Euro weaker after German data

The euro is offside versus the US dollar this morning after German IFO business climate figures came in a touch lower than expected.

The German IFO report surveys manufacturers, retailers and builders to gauge business sentiment. The reading for June came in at 105.9, when analysts were expecting 106 after May’s reading of 105.7. The euro dipped versus the US dollar on the back of the report due to missed expectations.

Traders believe the Federal Reserve is going to tighten its monetary policy in the next few months, which is another reason they were selling the euro and buying the US dollar.

We are not expecting any economic announcements from the US today, but there is a raft of economic updates tomorrow and Wednesday. Traders are not viewing strong economic updates as a sign that the Fed will reduce the size of the quantitative easing scheme, so if the announcements are positive we could see the euro lose more ground to the US dollar over the next 48 hours. 

Spot FX EUR/USD chart

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