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Euro to Dollar – German IFO January 27th 2009

The Euro received a boost this morning as German IFO data releaed at 9.00, beat anlaysts expectations by some margin. Last month’s figures were 82.7, and the forecast for this month was 81.0, but came in at 83.00.

This survey is highly respected due to it’s large sample size and historic correlation with German and wider Euroland economic conditions. It tends to have a siginficant market impact on release, and following the news the euro dollar moved higher immediately. This is a leading indicator of economic health, asĀ  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 etc. The survey is based on 7,000 businesses which also asks respondents to rate the relative level of current business conditions and expectations for the next 6 months. As a result of better than expected data the pair moved higher as is generally the case, but have since fallen back.