German IFO Business Climate Index eases to 88.5 in August vs. 86.8 expected

• German IFO Business Climate Index came in at 88.5 in August.
• IFO Current Economic Assessment for Germany dropped to 97.5 this month.
• August German IFO Expectations Index arrived at 80.3, a big beat.

The headline German IFO Business Climate Index ticked down slightly to 88.5 in August versus the previous month's 88.7 and the market consensus of 86.8.

Meanwhile, the Current Economic Assessment dropped to 97.5 points in the reported month as compared to July's 97.7 and 96.0 expected.

The IFO Expectations Index – indicating firms’ projections for the next six months, fell to 80.3 in August from the last month’s 80.4 and against the estimates of 78.6.

Market reaction

EUR/USD remains uninspired by the upbeat German IFO survey. At the time of writing, the pair is trading at 1.0000, up 0.37% on the day.

About German IFO

The headline IFO business climate index was rebased and recalibrated in April after the IFO Research Institute changed the series from the base year of 2000 to the base year of 2005 as of May 2011 and then changed the series to include services as of April 2018. The survey now includes 9,000 monthly survey responses from firms in the manufacturing, service sector, trade and construction.