The Euro climbed to its highest level in three weeks against the US Dollar on Tuesday after it shrugged off data which showed that economic sentiment was waning in Germany and found support from its gains against the Japanese Yen.
According to data released by the ZEW Centre for Economic Research, economic sentiment in the Eurozone’s largest economy waned in February as worries over a possible slowdown in the Eurozone and US economic recoveries weighed on investor confidence.
ZEW said that its index of German economic sentiment came in at 55.7 this month, down from 61.7 in January. Analysts had expected an unchanged reading.
The Euro climbed as it made gains against the Japanese Yen following the Bank of Japan’s decision to keep interest rates on hold and extend a bank lending scheme in an attempt to increase the effectiveness of its massive quantitative easing programme. The news weakened demand for safe haven currencies and bolstered demand for perceived riskier assets such as the Euro.
The single currency is likely to push higher against the US Dollar as the session progresses as data due for release out of the US is expected to show a decline in manufacturing in New York State. The extreme winter weather which has hit much of the USA is likely to have impacted on production in the State which has been hit by heavy snowfalls and bitterly cold temperatures.
Wednesday sees the release of the latest Eurozone Construction report which is forecast to show that activity in the sector improved in December.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3728 ,
Euro,,British Pound,0.8327 ,
Euro,,Australian Dollar,1.5214 ,
Euro,,Canadian Dollar,1.5054 ,