The Euro firmed against the Pound building on last week’s gains to push the GBP/EUR pair back down towards the 1.20 mark after business sentiment data out of the Eurozone’s largest economy beat economist forecasts.
According to the German IFO Institute for Economic Research based in Munich, German business sentiment increased in January. The business climate index ticked higher to 110.6, beating economist forecasts for a figure of 110.0 and was higher than December’s reading of 109.5.
Other data released by the IFO also proved positive for the Euro as business expectations rose to 108.9 in January, beating the previous month’s figure of 107.4 and economist expectations for a figure of 108.0.
“German businesses remain die-hard optimists. The January IFO just increased to the highest level since July 2011… whilst the small growth conundrum of the German economy continues. The growth performance throughout 2013 was much weaker than soft indicators had suggested. This dichotomy worsened towards the end of last year, which saw an unexpected disappointing growth performance despite a new acceleration of sentiment indicators, said a senior economist at ING.
On Tuesday the Euro could tick higher against the Pound as investors expect a report due will show that the UK economy expanded at a slower pace in the final quarter of 2013. If however the data shows the opposite then we can expect Sterling to gain.
Despite this positive data we can expect the Euro to come under pressure on Friday as Eurozone unemployment data is expected to show that the number of Europeans unable to get work remained at record highs at the end of 2013.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3695 ,
Euro,,British Pound,0.8281 ,
Euro,,Australian Dollar,1.5710 ,
Euro,,Canadian Dollar,1.5148 ,