Following the excitement of Wednesday’s FOMC statement and rate decision which was generally received with little surprise, the currency markets return to normal today with the usual round of fundamental news on the economic calendar for the euro to dollar pair, starting in Europe with the German IFO Business Climate data, which is forecast at 92.1 against a previous of 90.50. This is generally considered to be one of the more important composite index data sets due to it’s large sample size and historic correlation with German and wider Eurozone economic conditions. It tends to have a major impact on the market when released, and is generally considered to be a leading indicator of economic health – businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment. The index is based on a survey of around 7,000 businesses, and they are asked to rate the  current business climate and outlook for the next 6 months. The figures are released monthly and will certainly move the euro to dollar pair when released. If the actual figures are better than expected then this is generally good for the home currency, in this case the euro. This is followed by the Italian Trade Balance, a much less important release, and the forecast is -0.72B against a previous of -0.63B.

The focus for afternoon trading in the US for the euro to dollar will be on the the two key sets of data, namely the weekly Unemployment Claims, and the Existing Home Sales. The first of these registers the number of people who have filed for unemployment insurance during the week, and the forecast for today is for virtually the same number as last week at 548,000 against 545,000, so little positive news there if this figure is correct. The second fundamental news story is in the housing sector with Home Sales forecast at 5.36M against a previous of 5.24M, so a minor improvement here. All this data is being released against the backdrop of the G20 meeting which start today in Pittsburgh, and the currency markets will once again be watching closely for any unscripted comments or veiled comments and statements as the session gets underway. All in all a busy day for the euro to dollar pair.

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