German IFO Institute's Business Climate Index deteriorates to 86.4 in March
German IFO Institute's Business Climate Index deteriorates to 86.4 in March from 88.4 in February, revised lower from 88.6.
The IFO Current Assessment Index remains steady at 86.7, while it was expected to come in lower at 86.0.
Expectations Index comes lower at 86.0, as expected, from 90.2 in February, revised lower from 90.5.
Market reaction
No meaningful impact on the Euro (EUR) after the data release. EUR/USD trades almost flat around 1.1600 as of writing.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.01% | 0.03% | 0.16% | 0.18% | 0.12% | 0.14% | |
| EUR | -0.02% | 0.00% | 0.02% | 0.14% | 0.16% | 0.09% | 0.12% | |
| GBP | -0.01% | -0.00% | 0.02% | 0.15% | 0.17% | 0.11% | 0.13% | |
| JPY | -0.03% | -0.02% | -0.02% | 0.13% | 0.15% | 0.07% | 0.10% | |
| CAD | -0.16% | -0.14% | -0.15% | -0.13% | 0.02% | -0.04% | -0.02% | |
| AUD | -0.18% | -0.16% | -0.17% | -0.15% | -0.02% | -0.07% | -0.05% | |
| NZD | -0.12% | -0.09% | -0.11% | -0.07% | 0.04% | 0.07% | 0.02% | |
| CHF | -0.14% | -0.12% | -0.13% | -0.10% | 0.02% | 0.05% | -0.02% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
(This section below was published at 07:23 GMT as a preview of the German IFO Survey data of March)
The German IFO Survey Overview
Germany’s IFO institute will publish its business survey for March on Wednesday at 09:00 GMT.
The headline IFO – Business Climate Index is forecast to fall to 86.1 in March from 88.6 in February.
The IFO – Current Assessment Index is expected to inch lower to 86.0, from 86.7 previously.
IFO – Expectations Index is projected to come at 86.0 in the reported month, against the previous reading of 90.5.
How could the German IFO Survey affect EUR/USD?
EUR/USD could stay subdued if Germany's IFO Business Survey data come as expected. The risk-sensitive pair struggles as the Euro (EUR) faces challenges amid ongoing uncertainty surrounding the United States (US)-Iran peace negotiations.
The US Dollar (USD) resilience reflects its safe-haven appeal amid persistent geopolitical uncertainty. Recent reports indicate that diplomatic efforts are gaining traction, with discussions centered around implementing a one-month ceasefire to create space for formal negotiations between Washington and Tehran. The Trump administration has reportedly presented Iran with a 15-point peace proposal aimed at ending hostilities in the Middle East. However, Iranian officials have publicly denied any formal breakthrough, though a senior source acknowledged that indirect communication channels have been active.
Technically, the EUR/USD is trading around 1.1600 at the time of writing. The 14-day Relative Strength Index (RSI) at 47 suggests neutral momentum. This indicates a lack of strong directional bias in the near term. The immediate support lies at the nine-day Exponential Moving Average (EMA) at 1.1578, while the initial resistance appears at the 50-day EMA of 1.1672.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
