Business sentiment towards current conditions and towards the future improved in February, giving the EUR much-needed support this morning.
It’s a particularly quiet day on the economic calendar today. With no material stats from the Asian session and no major stats due out of the U.S later today.
The lack of stats left the market focus on German business sentiment figures for February this morning.
German Business Sentiment
In February, Germany’s IFO Business Climate Index rose from 90.3 to 92.4. Economists had forecast an increase to 90.5.
An improvement in both current sentiment and business expectations supported the pickup in the Business Climate Index.
The Business Expectations sub-index rose from 91.5 to 94.2, with the current assessment sub-index increasing from 89.2 to 90.6. Both came in ahead of forecasts.
According to the February survey,
In manufacturing, the index jumped to hits highest level since Nov-2018. The Business Climate Index rose across all major branches of industry.
There was also a pickup in the service sector Business Climate Index. Service sector firms were more satisfied with their current situation and less pessimistic about the future.
Ahead of the stats, it was a mixed start to the day for the EUR, which rose to an early high $1.21356 before sliding to a pre-stat low of $1.20923.
Upon the release of the IFO Business Climate survey, the EUR rose from $1.21003 to $1.21133 before easing back.
At the time of writing, the EUR was down by 0.04% to $1.21089.
While the EUR found support from the pickup in business sentiment, the DAX30 continued to struggle.
At the time of writing, the DAX30 was down by 0.96%, with rising commodity prices reigniting inflation fears.
ECB President Lagarde is due to speak later today. Expect any chatter on the economic outlook or inflation to move the dial.