Forex
Home›Forex›Major Pairs›EUR/USD firms but stays below 1.1700 as Germany IFO im…
EUR/USD firms but stays below 1.1700 as Germany IFO improves
Germany’s IFO jumped to a one year high, and BBH points to stronger Eurozone activity and above target inflation as support for an ECB hike in September, while a widening EU US rate gap keeps EUR/USD capped near 1.1800.
Brown Brothers Harriman’s (BBH) Elias Haddad said EUR/USD is firmer but still trading below 1.1700, with the pair influenced by improving Eurozone indicators. BBH linked the tone to Germany’s IFO business climate survey, which rose to a one year high of 88.8 in August, ahead of the consensus estimate of 87.2 and the prior reading of 86.7, reflecting stronger current conditions and expectations. Haddad noted the move echoes the recovery seen in Eurozone August PMI and ZEW surveys. The bank said strengthening Eurozone activity and above target inflation bolster expectations for a September European Central Bank rate hike. That view is contrasted with what BBH described as dovish risk around Federal Reserve policy that could shift expectations for the US rate path. BBH also highlighted the impact of a widening EU US rate gap, pointing to resistance near 1.1800 and support at the 200 day moving average around 1.1632.
Latest closeEUR/USD 1.157 ▲0.4%