Germany’s stellar economic year isn’t enough to prevent companies and investors from getting a touch of the nerves.The closely watched Ifo index of business confidence eased back from a record high in August — a slight drop but one that follows a separate survey showing a third monthly slide in investor confidence in the nation. The wavering in sentiment comes even as economic data shows the country on track for its strongest growth since 2011, and can be pinned largely on one development: the appreciation of the euro.
“Most companies do not change prices immediately in their foreign markets when the exchange rate changes — that means their margins will be smaller and I’m sure the export industry is concerned about that,” Clemens Fuest, president of the Munich-based Ifo Institute, said in a Bloomberg Radio interview. “If the euro rises above something like $1.20, I think companies will be concerned about it. But it’s just one factor.”
Source: Euro Strength Takes the Shine Off Germany’s Bumper Economic Year – Bloomberg
Will Draghi or Yellen Deliver a Summer Bombshell?
Hurricane Harvey Hits Oil as Gold Relaxes in Jackson Hole
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Craig Erlam
Latest posts by Craig Erlam (see all)
- EUR/GBP – Inverse Head and Shoulders Forming? - 01/25/2021
- Oil and gold steady, bitcoin jumpy - 01/25/2021
- A mixed start to a big week - 01/25/2021