German Ifo business climate index rises above expectations in August

The economic data for Germany remaining in line with the strong GDP growth momentum in the euro area. The German Ifo business survey for August was quite notable. The headline Ifo business climate surpassed expectations, in line with the results of most other economic surveys this week, including the PMIs. However, the print dropped 1 point from the post-reunification high reached in July to hint at an exceptionally strong level of confidence.

The upside surprise was related to an improved assessment of the outlook, for which the relevant index rose to the highest in three and half years near the top of range on the series, while the current assessment dropped slightly from July’s record high but still represented the second best reading since reunification.

Sector wise, the respective business climate indices for construction and manufacturing reached new record highs, with autos firms notably unperturbed by increasingly toxic allegations related to price fixing and the ongoing diesel emissions-testing scandal.

However, on the contrary, car dealers were slightly more downbeat, accounting for the decline in survey’s measure of retail sector sentiment that along with a slight weakening in sentiment among wholesalers, accounted for the small drop in the Ifo’s headline business climate index, stated Daiwa Capital Markets Research.

At 18:00 GMT the FxWirePro's Hourly Strength Index of Euro was neutral at 39.8292, while the FxWirePro's Hourly Strength Index of US Dollar was slightly neutral at -48.1844. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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