Time | Country | Event | Period | Previous value | Forecast | Actual |
---|
09:00 | Germany | IFO - Current Assessment | January | 85.1 | 85.4 | 86.1 |
09:00 | Germany | IFO - Expectations | January | 84.4 | 84.2 | 84.2 |
09:00 | Germany | IFO - Business Climate | January | 84.7 | 84.7 | 85.1 |
EUR traded mixed against other major currencies in the European session on Friday as investors digested Ifo’s business survey for Germany, the Eurozone’s largest economy, while awaiting policy updates from major central banks, including the European Central Bank, later this week.
The single European currency rose versus AUD, CAD and USD, fell versus CHF and JPY, and changed little versus GBP.
Ifo reported its latest survey revealed that sentiment among companies in Germany improved slightly in January with the ifo business climate index increasing to 85.1 points, up from 84.7 points in December 2024. Economists had forecast the indicator to remain unchanged at 84.7. According to the report, the improvement reflected a more positive assessment of the current situation, while expectations worsened again.
Today’s report followed better-than-anticipated euro area flash January PMI data on Friday, adding to hopes that the ECB may not have to ease policy this year as sharply as recently thought.
Now, investors’ focus is turning to this week’s policy meeting of the ECB’s policymakers, the outcome of which will be announced on Thursday.
Markets widely expect the ECB will cut its key interest rates by another 25 basis points with its policymakers noting that inflation in the euro area is still projected to decline to the target in 2025. Investors will scrutinize the central bank’s policy statement and the comments of its president Christine Lagarde on hints whether three more rate decreases are likely to come this year after Thursday's reduction.
Recently, several representatives of the ECB have messaged that they believe that interest rates in the Eurozone should be lowered to 2%, the level viewed by them as a neutral policy rate that neither boosts nor restricts the region’s economy.
Apart from the ECB, the U.S. Federal Reserve and the Bank of Canada are also set to meet this week. The Fed is anticipated to keep its interest rates unchanged this week, while the BoC is seen to cut by 25 basis points.