By: DailyForex.com
For the third consecutive month, it was reported by the CESifo Group that Germany’s business morale took another hit. According to the group, the reading for February’s IFO outlook report fell to 105.7 from 107.3, against expectations of a slighter decline to 106.7. That was the sharpest decline since 2008, not longer after Lehman Brothers declared bankruptcy. With Germany considered the “workhorse” of the Eurozone, concerns from the manufacturing sector there would weigh heavily on the Eurozone’s economic outlook.
As reported at 10:56 am (GMT) in London, the EUR/USD was trading lower at $1.1014, down 0.12%; the pair has ranged from $1.0993 to $1.1053 in today’s trading session. The EUR/JPY is also lower at 123.2615 Yen, a decline of 1.04%; today’s trading range is 123.1331 Yen at the low end and 124.6324 Yen at the upper end.
IFO Sentiment Impacted by Growth Concerns
Analysts say that the problem continues to be the lack of growth in Germany’s key trading partners, i.e. Asia, generally, and China, specifically, but Latin America, as well. They also have pointed out that German manufacturing, for all intents and purposes, is relying on stronger markets like the US and UK to stay afloat. However, there is a growing concern among German manufacturers that the overall global growth problem could impact future demand there which would negatively impact German growth.