MW : Strong German Ifo reading gives euro temporary lift
The August Ifo index rose to 90.5, up from 87.4 in July and surpassing expectations for an increase to 88.8.
The Ifo gauge is made up of two sub-indexes, which measure current conditions and business expectations. The Ifo current-business-conditions index rose to 86.1 from July's reading of 84.4, gaining for the second straight month. The expectations index, which measures confidence in the outlook for the next six months, jumped to 95.0 from 90.4 in July. See full story.
The euro (CUR_EURUSD 1.43, -.00, -0.21%) jumped to a high of $1.4351 versus the dollar, but then trimmed gains to trade at $1.4298 in recent action, little changed from $1.4304 in North American trade late Tuesday.The euro rose to its highest level versus the British pound since June and remained 0.4% higher at 87.82 British pence.
Analysts said the retreat versus the dollar came on apparent profit taking, noting that a strong number had been expected.
Strategists noted that the U.S. dollar, which has typically weakened in response to favorable economic data and any corresponding rise in investors' appetite for equities and risky assets, didn't succumb to pressure following Tuesday's stronger-than-expected jump in U.S. consumer confidence.
"Although the U.S. unit remains relatively on offer, range trading seems the name of the game for now, as the limited reaction ... to the surge in U.S. consumer confidence also demonstrated," wrote strategists at UniCredit MIB in Milan, in a note to clients.
"Investors may then wait for the new U.S. jobs report on Sept. 4 before making significant moves."
U.S. stock index futures were flat to slightly lower Wednesday, ahead of the 8:30 a.m. Eastern release of U.S. durable-goods orders for July. New-home sales for July are set for release at 10 a.m. See Indications.
Economists polled by MarketWatch expect a 4% rise in orders, while new-home sales are expected to rise to 395,000 from 384,000.
The dollar was slightly lower versus the Japanese currency, trading at 94.10 yen compared to 94.18 yen late Tuesday.
The British pound fell to $1.6248 versus the dollar, down from $1.6347.
The dollar index (DXY 78.37, +0.13, +0.17%) , which tracks the greenback against a trade-weighted basket of six major currencies, traded at 78.343, up from 78.240 late Tuesday.
