EUR/USD has edged downwards on Wednesday, as the pair trades close just below the 1.38 level. In economic news, German Ifo Business Climate weakened in February but met expectations. In economic news, German Consumer Climate remains at high levels and matched the forecast. In the US, Tuesday's numbers were a mix. Consumer Confidence hit a six-year high, but New Home Sales slipped in February. Wednesday's key release is Core Durable Goods Orders. The markets are expecting a much smaller gain than in the previous release.
German Consumer Climate remains at high levels, posting a second straight reading of 8.5 points, matching the forecast. The indicator has steadily risen, and the last time we saw a stronger reading was back in 2007, before the global economic crisis. German Business Climate also looked sharp in February. Increasing consumer confidence usually translates into more consumer spending, which is a critical component of economic growth.
US numbers were a mix on Tuesday. CB Consumer Confidence jumped to 82.3 points, easily surpassing the estimate of 78.7 points. This was the key indicator's best showing since December 2007. The news wasn't as good from the housing sector, as New Home Sales fell to 440 thousand, down sharply from the January release of 468 thousand. The reading was short of the estimate of 447 thousand. We'll get a look at Pending Home Sales on Thursday.
The US and its European allies have imposed limited sanctions on Russia after its annexation of Crimea, but are holding off on additional measures if Russia does not take further military action. The lack of a tough response from the West reflects divisions within Europe over how strong a stance to take against Moscow. Meanwhile, the Ukraine has signed an association agreement with the EU and is seeking a loan package of up to $20 billion from the IMF. Ukraine's economy has suffered badly after months of political turmoil.
EUR/USD 1.3800 H: 1.3823 L: 1.3790
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