Created
: 2025.10.27












2025.10.27 16:21
Germany's IFO institute will publish its business survey for October on Monday at 0900 GMT. The headline IFO Business Climate Index is expected to edge higher to 87.8 this month, from a 87.7 reading in September.
The Current Assessment sub-index is set to tick a tad lower to 85.5 in October from September's 85.7.
EUR/USD is likely to remain steady if the IFO Business Survey data turn out mixed, as anticipated. Any surprise uptick in the German business activity could provide support for the Euro (EUR), along with receiving support after European Central Bank (ECB) Governing Council member José Luis Escrivá said on Sunday that he is satisfied with current settings for borrowing costs, while inflation is at the target.
The EUR/USD pair may face challenges as the US Dollar (USD) may gain ground following reports that the United States (US) and Chinese negotiators have reached a consensus on major disputes. This development paves the way for Presidents Donald Trump and Xi Jinping to meet on Thursday to finalize a trade deal aimed at easing tensions.
Technically, the EUR/USD moves little after three days of gains, hovering around 1.1630 at the time of writing. The 14-day Relative Strength Index (RSI) remains below the 50 level, strengthening the bearish bias. The pair may find its initial support at the psychological level of 1.1600, followed by the two-month low of 1.1542. On the upside, the immediate barrier lies at the nine-day EMA of 1.1628, followed by the 50-day EMA at 1.1660.
The German economy has a significant impact on the Euro due to its status as the largest economy within the Eurozone. Germany's economic performance, its GDP, employment, and inflation, can greatly influence the overall stability and confidence in the Euro. As Germany's economy strengthens, it can bolster the Euro's value, while the opposite is true if it weakens. Overall, the German economy plays a crucial role in shaping the Euro's strength and perception in global markets.
Germany is the largest economy in the Eurozone and therefore an influential actor in the region. During the Eurozone sovereign debt crisis in 2009-12, Germany was pivotal in setting up various stability funds to bail out debtor countries. It took a leadership role in the implementation of the 'Fiscal Compact' following the crisis - a set of more stringent rules to manage member states' finances and punish 'debt sinners'. Germany spearheaded a culture of 'Financial Stability' and the German economic model has been widely used as a blueprint for economic growth by fellow Eurozone members.
Bunds are bonds issued by the German government. Like all bonds they pay holders a regular interest payment, or coupon, followed by the full value of the loan, or principal, at maturity. Because Germany has the largest economy in the Eurozone, Bunds are used as a benchmark for other European government bonds. Long-term Bunds are viewed as a solid, risk-free investment as they are backed by the full faith and credit of the German nation. For this reason they are treated as a safe-haven by investors - gaining in value in times of crisis, whilst falling during periods of prosperity.
German Bund Yields measure the annual return an investor can expect from holding German government bonds, or Bunds. Like other bonds, Bunds pay holders interest at regular intervals, called the 'coupon', followed by the full value of the bond at maturity. Whilst the coupon is fixed, the Yield varies as it takes into account changes in the bond's price, and it is therefore considered a more accurate reflection of return. A decline in the bund's price raises the coupon as a percentage of the loan, resulting in a higher Yield and vice versa for a rise. This explains why Bund Yields move inversely to prices.
The Bundesbank is the central bank of Germany. It plays a key role in implementing monetary policy within Germany, and central banks in the region more broadly. Its goal is price stability, or keeping inflation low and predictable. It is responsible for ensuring the smooth operation of payment systems in Germany and participates in the oversight of financial institutions. The Bundesbank has a reputation for being conservative, prioritizing the fight against inflation over economic growth. It has been influential in the setup and policy of the European Central Bank (ECB).
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Created
: 2025.10.27
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Last updated
: 2025.10.27
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