In March, the business climate in Germany improved, but this did't affect the Euro
At the beginning of the new week, the euro/dollar exchange rate is trading on the approaches to the resistance level of 1.1800.
The index of personal consumption expenditures – an important inflation indicator in the United States-rose by 1.4% last month, and this is slightly below expectations. The business climate in Germany, according to the IFO survey, improved to 96.6 in March. These results complement the favorable data for the region released earlier last week, although without any positive impact on the euro. IFO economists also said that in the first quarter they expect a moderate contraction of 0.7% in the German economy, noting the strength of German industry and high export expectations due to high demand from the United States and China. And there is also an improvement in the climate in the service sector.
Danske Bank maintains its forecast that the euro/dollar exchange rate will continue to decline. According to the bank's analysts, the current pressure on the pair is mainly caused by a combination of weakness in Asia, global, albeit slight, tightening of liquidity conditions, and short-term economic uncertainty. Probably, these factors will remain relevant in the near future, so the risk of a decline in quotations to the support of 1.1500 remains high. In general, other major investment banks adhere to a similar assessment.
In the forecast, I assume a corrective growth of the euro/dollar exchange rate to 1.1850.