In yesterday’s monthly report the German central bank offered a positive-yet-cautious economic outlook. The Bundesbank noted that ‘signs of a dramatic upswing are lacking’ and the pace of recovery remains uneven, and data published this morning seems to confirm this view.
The Euro to Pound Exchange Rate is currently trading in the region of 0.8445 as of 10:20 GMT
Although the German Ifo gauge of business confidence increased for a fifth month as forecast, the gain failed to meet economists’ estimates.
The Ifo index advanced from a revised 107.6 in August to 107.7, lower than the 108.0 level expected.
However, the result is still a two-year high and indicates that Germany’s economic recovery is continuing.
Meanwhile, a gauge of current situation sentiment fell from 112 to 111.4 in September, despite economists expecting an increase to 112.5.
Conversely, a measure of German IFO expectations climbed from 103.3 to 104.2 this month.
The EUR/GBP Exchange Rate hit a high of 0.8464
In the immediate aftermath of the reports’ publication the Euro softened against peers like the US Dollar and Pound, although EUR/USD losses were limited as US political policy concerns weighed on the ‘Greenback’. The EUR/GBP pairing also recovered ground after UK mortgage approvals advanced by less than expected.
As stated by one Frankfurt based economist; Germany is having a good but not roaring recovery. We’ve seen a row of good data and companies do have expectations of better export performance.’
And with German Chancellor Angela Merkel currently engaged in coalition talks, senior economist Christian Schulz observed; ‘We are in growth territory, but not in runaway growth territory. The debate in Germany is shifting to the centre-left; we’re going to see more of a focus on fairness, perhaps higher taxes, a bit higher spending.’
While the EUR/USD pairing may experience further movement following the publication of US consumer confidence figures at 15:00 GMT, investors will also be looking ahead to tomorrow’s German Gfk consumer confidence survey.
Current Euro (EUR) Exchange Rates
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The Euro/US Dollar Exchange Rate is currently in the region of: 1.3500 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8445 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4384 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6238 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7409 <
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1843 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6951 <
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.6153 <
(Correct as of 10:20 GMT)
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