Germany’s IFO survey hits a one-year high at 88.8, bolstering expectations for a September ECB rate increase amid Fed dovish risks.
EUR/USD climbed but remained below 1.1700 after Germany’s IFO business climate survey rose to 88.8 in August, exceeding consensus estimates of 87.2 and marking a one-year high. The improvement was driven by better current conditions and expectations, aligning with recent Eurozone PMI and ZEW survey gains.
Prior to this, July’s IFO reading stood at 86.7, while Eurozone inflation has persistently exceeded the ECB’s 2% target. Markets now price a 95% chance of a rate hike at the ECB’s September 10 meeting, contrasting with growing expectations of Fed dovishness.
Resistance for EUR/USD is seen near 1.1800, with support at the 200-day moving average of 1.1632. A widening EU-US rate gap continues to underpin the pair’s recent strength.