German Business Confidence Falls

Source: Daily FX

The IFO Institute's measurement of German business confidence fell for the first time in four months. Rising energy costs on the back of record oil prices and a strong Euro has dimed the outlook for Europe's biggest economy. The business climate index fell to 102.4 from 104.8; current assessment fell to 108.4 from 11.5 and expectations to 96.8 from 98.4. Despite their waning confidence, many believe that the economy remains robust and that it is headed for a period of moderation versus a significant slowdown. German companies are benefitting from strong demand from emerging markets Russia, China and Brazil. Although many feel that a slowdown in Europe will alleviate inflationary pressures, the ECB has remained staunch in its hawkish stance. However, after recent comments hinting that a future rate hike was in store, several committee members including Bonello have refuted those notions.