Fading Business Confidence in Germany Triggers EURUSD Short Covering

EUR shorts covered positions after September German IFO came in at 92.9, which was below expectations, but not as weak as earlier rumors, which ranged between sub-90 and 92.5. Profit taking was the overriding theme after the market was already positioned for a weak number. Once 1.4640 stops held the pair popped higher to trade at 1.4685 bid before edging lower. Price action is choppy, with the market reacting comments on Bloomberg television from IFO’s Nerb who said the time has come for ECB to cut rates and he expects the ECB to signal that it will cut rates in the coming months. These remarks followed Tuesday’s calls from economists for the ECB to cut rates immediately.