German Business Confidence Drops for a Sixth Month, Euro Under Pressure - 24.9.2012

The German IFO Business Climate fell to 101.4 in September down from 102.3 in August, the figure falls for a sixth straight month according to the Center of Economic Studies. Market participants were expecting the German IFO Business Climate to increase slightly to 102.5 as Mario Draghi announced on September 6 the short-term bond buying program, however it surprisingly dropped. Additionally the German IFO Current Conditions fell more than expected to 110.3 in September compared to a revised 111.1 in August. Also the German IFO Expectations decreased to 93.2 in September falling from 94.2 in August. Lower than expected readings of the German IFO Business Climate Index indicate weakness in the German economy and by extension to the Euro-zone since Germany is the biggest economy in the Euro area. The Euro after the release dropped against the greenback from 1.2954 to 1.2909 or decreased by more than 0.30% amid worse than expected readings for the single currency.