German Ifo business climate index falls unexpectedly in September

The German Ifo business climate fell sharply in September, following the disappointing purchasing managers’ indices report. The business climate index dropped unexpectedly to 102.8 to September from 103.7. The fall was mainly because of the expectation component. The assessment of the current economic situation dropped to 105.9.

However, after today’s drop, this is no longer certain. This is all the more true given that the composite purchasing managers’ indices, which comprise the industry and the services sector, have recently fallen sharply in Germany and the euro area and have reached new lows this year. This corresponds to the downward trend in German manufacturing orders. The German central bank anticipates the economic growth to have stagnated in the third quarter.

“After the disappointing data of recent days, we see certain downside risks for our growth forecast for Germany (2018: 1.8 percent; 2019: 1.6 percent). This is also true for our eurozone forecasts (2018: 2.0 percent; 2019: 1.8 percent)”, stated Commerzbank in a research report.

At 11:00 GMT the FxWirePro's Hourly Strength Index of Euro was slightly bearish at -60.1947, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 58.9371. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex