Euro: IFO in line, Saves the Euro from a Major Decline

The Euro was left out of the big moves today as the currency remained trapped within a 50 pip trading range against the US dollar. The much awaited German IFO report proved to be a non-event with business sentiment holding steady in the month of May. Even though the assessment of current conditions was downgraded slightly, businesses were more optimistic about conditions ahead.

The lofty levels of the German business sentiment index and the ZEW analyst sentiment survey continue to illustrate the region?s economic resilience. The prospect of another rate hike by the ECB has limited any major decline in the currency. Meanwhile Swiss employment numbers were also released this morning. The level of employment continues to grow with the employment rate ticking up from 1.6 to 1.8 percent. A healthy labor market and strong retail sales should help to boost the Swiss KoF leading indicators for the month of May while the weak franc should have helped to boost trade in the month of April.