The EUR/USD cross is again trading below 1.11, 24 hours after the release of very weak German macro data. The Ifo business climate index fell 1.5pp to 94.3 in August, its lowest level since November 2012. German GDP contracted 0.1% qoq in Q2 and there is mounting evidence that it may have contracted further in Q3, which would mean the economy having gone into recession. Pressure is mounting on the German government to loosen fiscal policy but any loosening of policy is more likely to come front the European Central Bank in the form of lower interest rates.
