Quick Brief – Gloomy German Ifo survey weighs on euro as dollar rebounds
Germany’s ifo Institute warns economy is “falling into crisis”
Jump in US durable goods orders aid dollar’s recovery
Worries are mounting about Europe’s largest economy after the President of the ifo Institute, Clemens Fuest, warned that Germany is “increasingly falling into crisis” in the latest monthly survey report. The ifo business climate index in August fell to the lowest since February, although the reading of 86.6 was slightly above forecasts of 86.0.
Speaking to Bloomberg, Fuest said the Germany economy needs expansionary fiscal and loose monetary policy to boost both consumption and investment.
German manufacturers have been struggling since 2022 when energy prices spiked and China’s own economic woes started to get worse, hurting exports.
In contrast, the US just reported an impressive 9.9% m/m surge in durable goods orders in July, denting expectations for a 50-bps rate cut by the Fed in September.
Euro/dollar is sharply down today in response, paring some of Friday’s strong gains in what is only a minor setback for the pair’s uptrend for now. The next focus is tomorrow’s detailed Q2 GDP numbers out of Germany, to be followed by inflation data out of both the Eurozone and the US on Friday.
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
