All trading involves risk. Losses can exceed deposits.

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.

All trading involves risk. Losses can exceed deposits.

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

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.