German business confidence, as measured by the IFO Institute survey declined to a 19 month low dragging the EUR/USD back through the psychologically important 1.3000 level in active European trade tonight. The Business Climate index registered a reading of 93.3 vs. expectations of 93.5, but more importantly the index for future expectations declined to 93.5 from 94.0 projected indicating that business conditions are not improving. No doubt high oil prices have crimpled demand stalling the economic recovery and putting most German businesses into what IFO's economist Gernot Nerb called a "wait and see mode". Although, high oil and higher euro have hurt the country's important manufacturing sector Traders will have to wait until Thursday's German employment data and Friday's Retail Sales reports to get a better gauge of the true state of EZ largest economy. In the meantime. tonight's poor IFO numbers have squelched any attempt at a euro rally continuation and the market will likely focus on US Existing Home.