Single Currency performance boosted by business climate Germany

Single Currency performance boosted by business climate Germany

08-26-2009 11:05

The common European currency started this week’s trading session rather weak, while it climbed today due to business sentiment in Germany improving again, indicating that the Eurozone nations are leaving the economic slump behind. The Sterling continues to decline as the economic situation in Great Britain remains critical.

Germany’s business climate

The Ifo Institute for Economic Research in Munich released its business climate gauge that rose and exceeded economists’ forecasts today. In the meantime, German confidence concerning its economy is improving, pushing the Single Currency up to a three-month record high against the Pound Sterling as the British economy demonstrates less significant indications of a recovery in comparison with Europe’s largest economy, Germany. Bullish patterns appeared on commodity markets today as a result of returned positivism, fueling currencies such as Norway’s Krone, whose economy is one of the major oil suppliers for the EU.

Engine of appreciation Euro

Currency analysts fear that the German economic figures are the engine of the Euro’s appreciation against the Sterling, given the fact that Germany is the wealthiest country in the European Union after France. Instability among the Single Currency and other major currencies is inclined to diminish, as evidence for an economic improvement becomes more manifest. However, the British economy is still struggling with a deeper slump, which spurs the European common currency to rise even more against the stagnating UK economy.