When is the German IFO Survey and how it could affect EUR/USD?
The German IFO Survey Overview
Germany’s IFO institute will publish its business survey for February on Monday at 09:00 GMT.
The headline IFO – Business Climate Index is forecast to edge up to 88.4 in February from 87.6 in January.
The IFO – Current Assessment Index is expected to come at 86.1 in February, compared with 85.7 previously.
IFO – Expectations Index is projected to rise to 90.5 in the reported month, from 89.5 reading prior.
How could the German IFO Survey affect EUR/USD?
EUR/USD could stay supported after Germany's IFO Business Survey release, as the Euro (EUR) strengthens against the US Dollar following the US Supreme Court’s ruling that President Donald Trump’s tariffs imposed under the IEEPA were unlawful without Congressional approval.
However, Trump is reportedly considering a new 15% global tariff under alternative trade laws, prolonging uncertainty over US trade policy. Meanwhile, the European Parliament’s trade chief said the European Union would propose suspending ratification of its trade deal with the US until clearer policy guidance is provided by the administration.
Technically, the EUR/USD extends its gains for the second successive session, trading around 1.1820 at the time of writing. The 14-day Relative Strength Index (RSI) has rebounded above the midline to 51, signaling neutral and stabilizing momentum. The pair is testing the immediate barrier at the nine-day EMA at 1.1825. A daily close above this short-term average could pave the way toward 1.2082, the highest level since June 2021. On the downside, a move back below the nine-day EMA would bring the 50-day EMA at 1.1776 support into focus.
German economy FAQs
The German economy has a significant impact on the Euro due to its status as the largest economy within the Eurozone. Germany's economic performance, its GDP, employment, and inflation, can greatly influence the overall stability and confidence in the Euro. As Germany's economy strengthens, it can bolster the Euro's value, while the opposite is true if it weakens. Overall, the German economy plays a crucial role in shaping the Euro's strength and perception in global markets.
Germany is the largest economy in the Eurozone and therefore an influential actor in the region. During the Eurozone sovereign debt crisis in 2009-12, Germany was pivotal in setting up various stability funds to bail out debtor countries. It took a leadership role in the implementation of the 'Fiscal Compact' following the crisis – a set of more stringent rules to manage member states’ finances and punish ‘debt sinners’. Germany spearheaded a culture of ‘Financial Stability’ and the German economic model has been widely used as a blueprint for economic growth by fellow Eurozone members.
Bunds are bonds issued by the German government. Like all bonds they pay holders a regular interest payment, or coupon, followed by the full value of the loan, or principal, at maturity. Because Germany has the largest economy in the Eurozone, Bunds are used as a benchmark for other European government bonds. Long-term Bunds are viewed as a solid, risk-free investment as they are backed by the full faith and credit of the German nation. For this reason they are treated as a safe-haven by investors – gaining in value in times of crisis, whilst falling during periods of prosperity.
German Bund Yields measure the annual return an investor can expect from holding German government bonds, or Bunds. Like other bonds, Bunds pay holders interest at regular intervals, called the ‘coupon’, followed by the full value of the bond at maturity. Whilst the coupon is fixed, the Yield varies as it takes into account changes in the bond's price, and it is therefore considered a more accurate reflection of return. A decline in the bund's price raises the coupon as a percentage of the loan, resulting in a higher Yield and vice versa for a rise. This explains why Bund Yields move inversely to prices.
The Bundesbank is the central bank of Germany. It plays a key role in implementing monetary policy within Germany, and central banks in the region more broadly. Its goal is price stability, or keeping inflation low and predictable. It is responsible for ensuring the smooth operation of payment systems in Germany and participates in the oversight of financial institutions. The Bundesbank has a reputation for being conservative, prioritizing the fight against inflation over economic growth. It has been influential in the setup and policy of the European Central Bank (ECB).
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