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Talking Points:

• Euro May Look Past German IFO Data Absent Significant Upside Surprise

• NZ Dollar Corrects Higher, Yen Gains as Asian Stocks Follow Wall St Lower

• See Economic Releases Directly on Your Charts with the DailyFX News App

Germany’s IFO Survey of business confidence headlines the economic calendar in European hours. Expectations call for a fifth consecutive decline, with the baseline Business Climate index expected to drop to a 16-month low at 105.8. The Euro may prove most responsive in the event of a better-than-expected outcome amid profit-taking on swollen speculative net-short positions. Alternatively, a downbeat result that reinforces the already significant dovish push from the ECB seems unlikely to be seen as offering novel-enough information to fuel meaningful volatility.

The Japanese Yen traded higher in overnight trade as Asian stocks declined, fueling demand for the safety-linked currency. The MSCI Asia Pacific regional benchmark stock index fell 0.1 percent in the move the newswires chalked up to follow-through on a slide on Wall Street. The New Zealand Dollar corrected higher having been the weakest among the majors vs. the US Dollar yesterday. The advance found added support in an upbeat set of Trade Balance figures. The Kiwi rose as much as 0.4 percent on average against its top counterparts.

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Asia Session

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Critical Levels

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com