Euro steady despite weak business confidence data

  • Germany’s Ifo Business Climate falls
  • German GDP expected to stall in Q4

EUR/USD is drifting higher on Wednesday and is trading at 1.0781, up 0.11%.

German Business Confidence dips

Germany’s Ifo Business Climate for May fell to 91.7, following a downwardly revised 93.4 in April and shy of the estimate of 93.0 points. This was the first decline after a six-month expansion. Business expectations fared worse, dropping from 91.7 to 88.6 and missing the estimate of 91.9 points.

German businesses are worried about economic conditions for the next 6 months, with the banking turmoil in the US, a rocky Chinese reopening and a weak eurozone economy all weighing on sentiment. Manufacturers reported a steep decline in expectations, which is not surprising, given that manufacturing PMI readings continue to indicate persistent contraction.

The markets are expecting more soft data out of Germany on Thursday – GfK consumer confidence is expected to come in at -24.0 for June, following -25.7 in May. Germany’s GDP is projected at 0.0% in the fourth quarter, unchanged from Q3. On an annualized basis, fourth-quarter GDP is expected to remain unchanged at -0.1%. If GDP surprises to the downside, the euro could lose ground.

US debt ceiling remains at a standoff

Congress remains at a standoff over the debt ceiling, despite Treasury Secretary Yellen’s warning that the US could default as early as June 1st. Republicans have countered that Yellen is scaremongering with a made-up deadline. Still, even if the actual deadline is a week or two later, Congress seems to be playing with fire to score political points. Investors are jittery, and stock markets have fallen while safe-havens such as gold and the US dollar have benefited from the crisis. We’ve seen this movie before, and Congress has always reached a deal before the deadline. Still, we can expect risk sentiment to slide and the US dollar to gain ground if the impasse continues.


EUR/USD Technical

  • EUR/USD faces resistance at 1.0887 and 1.0969
  • 1.0824 and 1.0742 are providing support

Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.