When is the German IFO survey and how it could affect EUR/USD?

The German IFO Business Survey Overview

The German IFO survey for February is due for release later today at 0900 GMT. The headline IFO Business Climate Index is seen higher at 90.5 versus 90.1 previous.

The Current Assessment sub-index is expected to drop to 88.9 this month vs. 89.2 prior while the IFO Expectations Index – indicating firms’ projections for the next six months – is likely to arrive at 91.9 in the reported month vs. 91.1 last.

Deviation impact on EUR/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 3 and 30 pips in deviations up to 3.0 to -4.2, although in some cases, if notable enough, a deviation can fuel movements of up to 60 pips.

How could affect EUR/USD?

The reflation trade has lifted the riskier assets, including the US Treasury yields, lifting the US dollar across the board. This, in turn, has weighed on the EUR/USD pair. The main currency pair trades neutral near session lows of 1.2113.

“A better-than-expected data is needed to lift the pair above the 50-day Simple Moving Average (SMA) hurdle, currently located at 1.2150,” FXStreet’s Analyst Omkar Godbole notes. On the data disappointment, the spot could retreat further towards the 5-DMA at 1.2097.

Key notes

Treasury yields surge on promising vaccine news, gold and oil recover

EUR/USD: The 50-day moving average is currently capping the upside move

Outlook for EUR/USD remains mixed – UOB

About the German IFO Business Climate

This German business sentiment index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. The Institute surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).