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When is the German IFO Survey and how it could affect EUR/USD?

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When is the German IFO Survey and how it could affect EUR/USD?

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2025.09.24 15:14

When is the German IFO Survey and how it could affect EUR/USD?

2025.09.24 15:14

The German IFO Survey Overview

Germany's IFO institute will publish its business survey for September on Wednesday at 08.00 GMT. The headline IFO Business Climate Index is expected to rise to 89.3 in September from the previous reading of 89.0.

Meanwhile, the Current Assessment sub-index is set to tick higher to 86.5 in September from August's 86.4.

The IFO Expectations Index, which reflects firms' projections for the next six months, is likely to rise to 92.0 in the reported month, as against a 91.6 figure printed in August.

How could the German IFO Survey affect EUR/USD?

EUR/USD trades on a negative note on the day in the lead up to the German IFO Business Survey. The major pair loses ground as the US Dollar strengthens after Federal Reserve (Fed) Chair Jerome Powell struck a cautious tone on further easing on Tuesday.

If data comes in better than expected, it could lift the Euro (EUR), with the first upside barrier seen at the September 16 high of 1.1878. The next resistance level emerges at the September 17 high of 1.1918, en route to the 1.1200 psychological level.

To the downside, the September 19 low of 1.1728 will offer some comfort to buyers. Extended losses could see a drop to the September 10 low of 1.1682. The next contention level is located at the September 5 low of 1.1648.

Economic Indicator

IFO - Business Climate

This German business sentiment index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. The Institute surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).

Euro FAQs

What is the Euro?

The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

What is the ECB and how does it impact the Euro?

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB's primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates - or the expectation of higher rates - will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

How does inflation data impact the value of the Euro?

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB's 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

How does economic data influence the value of the Euro?

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone's economy.

How does the Trade Balance impact the Euro?

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

Created

: 2025.09.24

Last updated

: 2025.09.24

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