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Outlook on the Ifo

H.S. Borji
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The euro was back in favour in Monday’s late afternoon session, rebounding sharply from a daily low of 1.3762 US. For euro traders, the attention shifts to the Ifo’s monthly business climate index scheduled for release Tuesday. The survey of 7,000 business leaders promises to shed light on German business confidence, which soared to a two-and-a-half year high last month.

The March reading is expected to show little change from the previous month, although escalating tensions in the Crimea region could weigh on business sentiment. Earlier this month the Centre for European Economic Research (ZEW) said economic expectations for Germany plunged in March, as Russia’s move to incorporate Crimea dampened experts’ optimism over the health of Europe’s largest economy.

The Ifo’s current assessment indicator rose 2 points to 114.4 last month. The business climate index rose from 110.6 to 111.3. The index of business expectations slipped 0.6 points to 108.3, Ifo data showed last month.

A leading indicator of German consumer sentiment courtesy of GfK is scheduled for release Wednesday.

As of North America’s late afternoon session, the EURUSD pair was trading at 1.3840, up nearly 0.4 percent from the previous close. The pair reached a daily high of 1.3873. In addition to the Ifo data, the EURUSD pair could be influenced by US housing and consumer confidence data, which are also scheduled for release Tuesday. New US home sales soared nearly ten percent to a seasonally-adjusted annual rate of 468,000 in January, the Commerce Department reported last month. February data could show home sales declined by 23,000 to a seasonally adjusted annual rate of 445,000, according to estimates.

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