Euro Halts Drop to Rally Higher on Upbeat German IFO Data

The  euro today halted its slide against against the  US dollar following the  release of  the  upbeat  German IFO business survey data in  the  early European session. The  EUR/USD currency pair was under intense selling pressure today as  the  greenback recovered from Friday’s selloff, which was triggered by  the  Fed Chair Jerome Powell‘s dovish speech.
The  EUR/USD currency pair today dropped from an  opening high of  1.1645 to  hit a  low of  1.1594 before rallying higher on  the  IFO release.
The  currency pair was on  a  downtrend from the  Asian session fueled by  the  greenback’s recovery as  tracked by  the  US Dollar Index. The  greenback ended last week quite weak following Jerome Powell’s dovish speech at  the  Jackson Hole symposium where he outlined some conditions for  future rate hikes. However, he also stated that inflation in  the  US was not accelerating and  that the  US economy was not overheating, which basically assured investors of  a  September rate hike. The  release of  the  upbeat German IFO business survey data provided the  currency pair with a  lifeline and  triggered a rally.
The  headline business climate index came in  at  103.8, which was much higher than the  expected 101.8. The  German IFO expectations met consensus estimates by  coming in  at  98.4, while the  current assessment was better than expected at  106.4 versus the estimated 105.3.
The  currency pair’s future performance is likely to  be affected by  tomorrow’s US advance goods trade balance data given the  almost empty European dockets.
The  EUR/USD currency pair was trading at  1.1635 as  at  12:16 GMT having recovered from a  low of  1.1594. The  EUR/JPY currency pair was trading at  129.15 having dropped from a  high of  129.58.

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