Germany’s latest business survey showed companies more positive about the months ahead than about current conditions, while the ECB’s Oct. 26 fixing put the euro at $1.1188 before policy decisions in Washington and Frankfurt.
The rate was below $1.12. The European Central Bank says its daily reference rates are informational benchmarks, not live trading prices. The ifo Business Climate Index rose to 90.2 points in October from 89.9 in September. Its expectations measure advanced to 91.6 from 90.4, while the current-assessment reading fell to 88.8 from 89.5.
The ifo Institute bases its monthly survey on responses from about 9,000 companies in manufacturing, services, trade and construction. It asks about current conditions and the outlook for the next six months. Clemens Fuest, president of the ifo Institute, said, “The economic recovery is continuing.”
FXStreet reported that EUR/USD’s rise after the survey had been erased within 11 five-minute bars and that the pair finished the session at its low. The outlet attributed the move to dollar buying ahead of the Federal Reserve meeting and said the gap between U.S. and euro-area interest rates supported the dollar.
The Fed’s target range is 3.75% to 4.00%, following a quarter-point increase in September. The ECB’s deposit rate is 2.50%. A Reuters poll conducted Oct. 5-8 found that 70 of 73 economists expected the ECB to hold rates at its October meeting, while 64 expected a quarter-point increase in December. Those figures reflect economists’ expectations, not ECB guidance.
The Fed’s meeting runs through Wednesday, Oct. 28. The ECB is scheduled to announce its decision at 9:15 a.m. ET (13:15 UTC) Thursday, Oct. 29, followed by a Bank of Japan decision Friday, Oct. 30, in a three-day sequence of central bank decisions.
