FXStreet Expert Contributor
FXStreet
Each month in Munich, the IFO Institute for Economic Research releases the IFO business climate survey. This is one of the most important economic figures for many Forex traders. The IFO Report is a figure that measures the results of 7,000 questionnaires completed by major German companies. The report measures the sentiment of the current and near future business climates. German companies have three options for responses when filling out the current business climate section of this survey; Good, Satisfactory, and Poor. For the near term climate questionnaire the firms have the following three options; Most Favorable, Unchanged, and More Unfavorable.
Basic Categories of the IFO Report:
Manufacturing
Construction
Whole sale
Retail sale
Understanding the Statistic:
The baseline of the IFO report is 100 points, and each month the number can fluctuate by 100 points above or below this baseline figure.
- An IFO report reading of 100 shows that the business climate has remained neutral.
- An IFO report reading above 100 means that the business climate has become healthier. The higher the number, the healthier the business climate.
- A strong economy might lead to inflationary pressure, which will in turn cause the ECB to tighten the interest rate. In this scenario, a tighter interest rate will lead to an appreciation of the Euro.
- An IFO report reading that falls below 100 signifies an unfavorable business climate which could lead to an economic slowdown or recession. To keep away from a recession, the ECB may decide to cut interest rates, which will in turn lead to a depreciating Euro.
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Editors’ Picks
EUR/USD extends the rally toward 1.1100 on sustained US Dollar weakness
EUR/USD extends the advance toward 1.1100 in the European session on Wednesday. The US Dollar continues to weaken across the board as US President Trump's reciprocal tariffs kicked in and aggravated economic concerns. Traders keep a close eye on trade talks and Fed Minutes for fresh cues.
GBP/USD holds firm near 1.2850 amid softer US Dollar
GBP/USD holds gains near 1.2850 in European trading on Wednesday. The pair’s uptick is supported by a sustained US Dollar weakness as investors remain wary over the impact of the escalating global trade war on the US economic prospects. Tariff updates and Fed Minutes are next in focus.
Japanese Yen retreats slightly after retesting multi-month high against broadly weaker USD
The Japanese Yen sticks to strong intraday gains heading into the European session on Thursday and currently trades near the year-to-date peak against its American counterpart. Intensifying trade war and heightening global recession fears continue to weigh on investors' sentiment.
Editors’ Picks
EUR/USD extends the rally toward 1.1100 on sustained US Dollar weakness
EUR/USD extends the advance toward 1.1100 in the European session on Wednesday. The US Dollar continues to weaken across the board as US President Trump's reciprocal tariffs kicked in and aggravated economic concerns. Traders keep a close eye on trade talks and Fed Minutes for fresh cues.
GBP/USD holds firm near 1.2850 amid softer US Dollar
GBP/USD holds gains near 1.2850 in European trading on Wednesday. The pair’s uptick is supported by a sustained US Dollar weakness as investors remain wary over the impact of the escalating global trade war on the US economic prospects. Tariff updates and Fed Minutes are next in focus.
Gold price builds on strong intraday gains; bulls retain control near $3,050 area amid risk-off mood
Gold price climbs back closer to the $3,050 area during the early European session on Thursday as worries that an all-out global trade war would push the world economy into recession continue to boost safe-haven demand.
Bitcoin, Ethereum and Ripple target $73,000 BTC, $1,300 ETH, and $1.30 XRP
Bitcoin price hovers around $76,200 on Wednesday after falling 3.59% the previous day. Ethereum and Ripple followed BTC’s footsteps and continued their downward trend.
The Fed is looking at a hefty price level
We are still in thrall to tariffs, the faux-macro “data” driving markets. The WSJ editorial board advised other countries to take their tariffs to zero so that Trump’s “reciprocal” tariffs will have to be zero, too. Cute, but no cigar.
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