German business sentiment was resilient in August, nudging the euro higher ahead of speeches from key central bankers later on Friday.

The Ifo Business Climate index, published by the Institute for Economic Research, slipped from 116.0 in July to 115.9 for the month of August.

This was a lesser deterioration than had been implied by the consensus among economists which forecast a reading of 115.0.

The bottom line though, Europe's largest economy is firing on all cylinders:

With the German economy performing so well, it will simply be hard to justify the Euro at current prices, particularly against the US Dollar.

As noted by Allianz, the Euro is still the world's most undervalued currency despite Germany's economic might.

Following the data, the euro to pound exchange rate arrested an earlier decline, steadying at 0.9182 pence in response to the report, while the EUR/USD currency pair also steadied around the 1.1782 level after having spent the opening of the session under pressure.

The survey, which measures changes in sentiment among manufacturers, builders, wholesalers and retailers, is an important barometer of economic conditions in key German industries. However, beyond the initial market reaction, its ability to influence the narrative could be limited on Friday.

"Amidst overriding anticipation ahead of the Jackson Hole speeches, the euro stabilised. Today’s major events will be Yellen’s speech and, later in the day, Mario Draghi’s," says the FX strategy team at Intesa Sanpaolo.

Traders have focused intensely this week on how Mario Draghi will use his Jackson Hole speech. Some have speculated that Draghi might attempt to jawbone the euro back from recent peaks, given that a strong currency can counter inflation, which offsets much of the work done by the ECB.

“So we wait to hear if Draghi will add to the comments in the ECB minutes suggesting concern over the EUR overshooting. The ECB obviously would prefer stability in the markets if and when they taper their QE programme and look to take rates back out of negative territory as the economy recovers and stabilises,” says Robin Wilkin, a global cross asset strategist at Lloyds Bank.

However, others have suggested he might use the speech to reinforce a more hawkish message sent out to the market in June, possibly hinting of a further tapering of its quantitative easing program later in the year. Some have also predicted that the speech will prove to be a non-event for markets, with no new information on ECB policy.

“If no new indications are expected from the Fed Chair, the ECB President seems even less likely to introduce new elements in his speech,” says the team at Intesa Sanpaolo.