German data supports euro bullish correction

The euro rose on Monday benefiting from the high German IFO Business Climate for November, indicating growth for the first time in seven months.

EUR/USD pair rose at 09:09 GMT trading around 1.2385, compared to the opening price for today 1.2360.

Gross Domestic Product (GDP) in Germany increased 0.1% for the third quarter, recovering from a contraction in the economy during the second quarter, but this does not negate the fact that the pace of economic growth remains weak according to what was confirmed by the German Central Bank recently, indicating the possibility of continued weak economy till the end of 2014.

The high euro came within bullish corrections after the severe decline witnessed last Friday, after ECB President Mario Draghi said the bank will do what it takes to support inflation rates, and added that the bank is ready to expand its stimulus program to boost inflation as quickly as possible.

Focus will be on the ECB decision next week, will the bank expand the quantitative policy? The annual consumer price index to be released on Friday will confirm the next ECB move.

If the consumer price index came worse than the expected 0.3% after last month’s 0.4%, this will negatively pressure the euro and push it to achieve further losses on the short and medium term.