EUR rose against other major currencies in the European session on Monday, recovering after Friday’s plunge, which followed the release of underwhelming Eurozone’s flash November PMI figures, which reinforced bets for an aggressive rate cut at the European Central Bank’s December meeting.
Meanwhile, today’s business confidence data from Germany added to evidence that the euro area’s largest economy is floundering.
According to ifo Institute, its Business Climate Index fell from 86.5 in October to 85.7 in November, indicating that sentiment among German companies became gloomier this month. Economists had predicted the indicator to slip to 86.0. The sharper-than-expected decline in the headline gauge reflected a steeper-than-anticipated drop in the current assessment component (to 84.3 from 85.7 in October versus markets’ forecast of 85.4) and a weaker-than-predicted fall in the expectations component (to 87.2 from 87.3 versus markets’ forecast of 87.0).
Later this week, markets will receive the ECB’s statistics on loans to non-financial corporations and money supply for October, the European Commission’s reports on business and consumer confidence in the Eurozone for November, and the preliminary inflation data for November.