Euro pares back some losses against Dollar and Sterling today after German confidence data. The Ifo business climate dropped 0.1 pts to 110.4, slightly be low expectation of 110.6, but stayed solid. Current assessment gauge improved to 115.6, better than consensus of 115.0. Meanwhile, expectation gauge dropped to 105.5, missing expectation of 106.3. Ifo head Clemens Fuest noted that "confidence in the German economy continues to be good" and "seems to be unfazed by the election of Donald Trump as U.S. president." Also from Germany, Q3 GDP was finalized at 0.2% qoq in Q3.
Dollar remains firm as solid economic data and FOMC minutes lifted treasury yields. The FOMC minutes for the November meeting reinforced the view that a Fed funds rate hike would be coming in December. The members generally judged ongoing improvement in the economic outlook. Information since the September meeting led them to believe that "the labor market had continued to strengthen" while "growth of economic activity had picked up from the modest pace seen in the first half of this year". On the employment market, policymakers acknowledged "solid" job gains, although the unemployment rate was "little changed in recent months".
As noted in the minutes, "almost all of them continued to judge that near-term risks to the economic outlook were roughly balanced". On the monetary policy, the minutes indicated that "most participants" judged that "it could well become appropriate to raise the target range for the federal funds rate relatively soon". Nonetheless, the December move might not be unanimous. As suggested in the November minutes, while "some members" suggested that a rate hike should occur at the next meeting so as to "preserve credibility" of the central bank, a "few" (the doves) emphasized a "cautious approach". More in FOMC Minutes Affirmed Rate Hike To Come 'Relatively Soon'.