Release Explanation: The Information und Forschung (Information and Research) report is based on a monthly survey from firms in manufacturing, construction, wholesaling and retailing. The firms are asked to give their assessments of the current business situation and their expectations for the next six months.
Trade Desk Thoughts: The German IFO business climate continued to decline in March, reaching a 26-year low. The index dropped to 82.1, after the index rose for the first time in the last six months in February.
The IFO business climate continues to deteriorate as Germany is starting to feel the effects of the credit crisis on a larger scale. Estimates are that the German economy will contract approximately 5% this year, the worst economic performance since World War II.
Forex Technical Reaction: The euro jumped 40 pips immediately after the release, despite the release being negative. Since the new trading day began, the euro traded in a 50-pip range, struggling to break below the low reached on Tuesday.