June 24: European session
German IFO business climate came at 109.7, below expectations of 110.3. According to IFO, the ECB’s measures had no major impact on German economy; Q2 will be significantly weaker, but outlook for the German economy is good and consumer activity remains strong and stable. EUR/USD rose from $1.3590 above $1.3620 as the market players bought euro on the dips.
In the UK the Bank of England’s Governor Mark Carney and MPC members had to answer question on the monthly inflation report before the parliamentary Treasury Select Committee. Carney said that the pace of job creation in the UK remains strong, but the rate hikes will be limited and gradual with timing dependant on the economic data. He underlined that the recent sterling strength has not yet been supported by improvement in competitiveness. The BoE’s Bean said that early withdrawal of stimulus may risk productivity gains and that he sees a case for later rather than earlier exit from stimulus. GBP/USD was hurt by this last comment and slid below $1.6980.