Following last week’s scrutiny on both central bank decisions monetary policy and Governor speeches focus was turned back to hard data in the form of German IFO Business climate and American home sales.
Both readings have recent became fairly inconsistent, German IFO missing two of the last five readings and US new home sales performing similarly.
Firstly, came the German IFO Business climate figure from Germany which exceeded its expected level 106.3 reaching 109.5 considerably above last month’s reading of 106.2 and hitting its highest levels for two years.
The landmark demonstrated that confidence was high regardless of Britain’s decision to leave the European union and there was renewed corporate confidence within Germany. Although the latest round of German IFO Business climate figures buoyed the euro growth within the single currency has been extremely weak and no doubt more turbulence will prevail if and when Britain triggers article 50 and begins its extraction from the EU.
Following the IFO numbers Euro/USD climbed from 1.1230 to a day’s high of 1.1273 closing at 1.1255 in the UK session. Likewise, the Euro enjoyed further gains against GBP closing the day at 1.1521 but weakening to Sterling to a daily low of 1.1476 just before mid-day.
In the afternoon focus turned to the US and the monthly US new home sales figure. They didn’t disappoint and reached 609k surpassing the anticipated 598k. The data demonstrated a small contraction dropping from 659k in August but was viewed well by markets. The average purchase value also decreased to $284,000.
The positives new homes data bode well for the USD and the greenback reversed some of its lost ground against the euros closing London’s session at 0.8884 from a day low of 0.8870.
Looking ahead tomorrows key data comes from Canada where Governor Stephen Poloz will be addressing Western Washington university. This speech is followed by US Conference board consumer confidence and the day is the concluded by FOMC Governor Stanley Fischer who is speaking at Harvard University.
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