Euro Pares Back From Earlier Gains After Economic Data

Euro Pares Back From Earlier Gains After Economic Data
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(December 19, 2017) The euro edged down against the dollar on Tuesday as data from Germany suggests business leaders in Europe’s largest economy have become less optimistic about the future.

EUR/USD was trading at 1.1799 as of 4:44 AM ET (09:44 GMT) from a high of 1.1819 earlier.

The Munich-based Ifo economic institute said its business climate index, based on a monthly survey of some 7,000 firms, edged down to 117.2 from an upwardly revised reading of 117.6 in November which was the highest on record.

The December reading came in lower than a Reuters consensus forecast for a value of 117.5.

Political uncertainty in Germany has also weighed down the euro. Germany’s Social Democrats (SPD) agreed on Friday to open talks in forming a government with Angela Merkel’s center-right party in an attempt to end a political deadlock. Merkel lost many supporters to the far-right in a Sept. 24 election, leaving the economic powerhouse in an inconclusive federal election. Merkel has been struggling to gain the support she needs to extend her role as Chancellor.

Meanwhile the euro rose against sterling, with EUR/GBP rising 0.25% to 0.8823.

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