The IFO reading for July beat estimates of the current conditions and expectations for business activity in Germany, bucking the trend of recent economic data which is been negatively impacted by Brexit.
The indices are used to indicate the health of the European economy and are likely to influence the position of the Euro.
Last month’s Brexit vote weighed on analysts’ estimations of Germany’s business climate. Real figures however proved to be more resilient to the UK’s decision than expected.
The German business sentiment index decreased only slightly by 0.4 points to a value of 108.3. The slightly lower figure still represents the second highest level the indicator has taken this year and beats estimates by 0.8 points.
The IFO Current Assessment of business conditions in Germany gained 0.1 point to last months’ value, now standing at 114.7. Analysts had predicted a drop to 114.0 due to an expected pessimistic business outlook post the UK’s decision to leave the European Union. The growth the index could record in July represents an unexpected upwards movement in enterprises evaluations of the current business situation in Germany.
The IFO Expectations fell from 103.1 to 102.2. The figure indicates a slight downwards adjustment to business’ rating of the future outlook for the coming six months. The figure shows however more optimism by businesses than analysts expected to see this month, beating estimates by 1 point.
There has been little movement in the Euro against its major competitors since the data was released. At 12.03pm EUR/USD stood at 1.09870, the EUR/GBP stood at 0.83674 and the EUR/JPY 116.78129.