The euro rally continued in early European trade today after the IFO survey of business confidence handily beat expectations printing at 83.7 vs. consensus calls of 82.1. The IFO release was the third positive economic surprise from the EZ this week, following on the heels of better ZEW and PMI data numbers. As a result the EUR/USD has rallied more than 300 points off the week’s lows as short covering continue unabated.

A slow meandering night of trade in the currency market with most of the majors quietly rangebound throughout Asian and early European trade. The economic data shed no new light with German IFO printing essentially in line with consensus expectations at 82.1 versus 82.2.

The IFO survey of business sentiment printed in line with consensus expectations coming in at 81.2 versus forecast of 82.2. The business expectations component improved marginally to 81.6 from 80.9 while the current assessment reading sunk lower to 82.7 from 84.3 the month prior but was nevertheless better than expectations of 82.5 print.

The IFO survey of business climate surprised to the upside printing at 83 versus 81 forecast while the current assessment component also beat expectations coming in at 86.8 versus 85 projected. Although the current assessment reading was actually worse than the month prior, reflecting the deteriorating conditions in the manufacturing sector, the overall IFO report suggested that at least for the time being sentiment amongst European business leader appears to have stabilized.