By Greg Holden
Germany’s publication of its Ifo Business Climate report was roughly as expected on Thursday. Analysts were expecting a reading of 110.6 making today’s 110.4 figure anti-climactic. Interestingly, the EUR/USD met solid resistance shortly after this report even though such a reading would typically boost the euro.
Today’s thin market conditions ahead of this weekend’s Easter holiday may be interfering with normal currency values. A number of investors have been anticipating a reevaluation at the start of next week as normal volume levels are reintroduced to the market.
Comments from the president of the European Central Bank (ECB), Jean-Claude Trichet, recently hinted at a softening of the central bank’s position in regards to monetary policy. The dovish sentiment has pulled down on the EUR in short-term trading with many traders beginning to shift away from the 17-nation single currency in anticipation of a fall.
The EUR/USD checked its recent rise towards 1.4650 and is now trading downward with a current price near 1.4570. The data out of Germany may have less to do with this movement than the ECB’s softened stance in regards to monetary policy adjustments. Traders may want to anticipate a downturn in this pair at the beginning of next week should the current environment remain unchanged.
Forex Market Analysis provided by ForexYard.
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