The euro rose against the US dollar on Tuesday, after a new report showed better business confidence in Germany than previously expected, the biggest economy in the European Union. The shared currency had smaller gains against the British pound following a tweet from US President Donald Trump that mentioned a trade deal with the United Kingdom.
Business climate in Germany improved in July, according to a fresh release from the ifo Institute for Economic Research. The Munich-based institute said that its business confidence index rose from 115.2 in June to 116.0 in July, which sets a new record high as German businesses became more optimistic. Analysts expected the index to drop to 114.9.
A subindex for the manufacturing sector also hit a record high, supported by an improved assessment for current conditions and a solid near term outlook. Meanwhile, businesses in the wholesale sector had weaker assessments for current conditions, despite more optimistic expectations over the short term.
Retailers were also less satisfied with current business conditions, which appear to have affected their short term outlook as well. The construction sector was on the better end, gaining more strength in current business conditions and future expectations.
The euro further rallied against the US dollar on the back of a tweet from the US president. Trump wrote that there is a major trade deal with the United Kingdom in the works, without giving further details on the deal. The tweet limited the shared currencyâs climb against the British pound.
EUR/USD climbed to 1.1691 as of 14:10 GMT on Tuesday from 1.1635 when trading began today. EUR/USD touched 1.1705 at 13:05 GMT today, a level last seen in January 2015. EUR/GBP rose to 0.8956, todayâs highest level, after starting the day at 0.8932.
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