According to research group Sentix euro zone investor sentiment rose this month – the first rise seen since March. The European Central Bank’s announcement on Thursday regarding buying bonds from the most indebted countries is cited as the primary cause of this six-month confidence high.
The research group released a statement which asserted; ‘The main reason for the general improvement in sentiment could well be ECB President Mario Draghi’s continued assertive manner and his institution’s intention, which is now concrete, to start buying crisis-stricken countries’ bonds again soon if they fulfil certain conditions.’
Investor sentiment in the euro zone is tracked by Sentix on a monthly basis and the data released today has shown the monthly index for September to be at -23.2, a great improvement on Augusts’ reading of -30.3. This result is also significantly better than that forecast by news agency Reuters who predicted by consensus a drop to -30.7.
Sentix went on the say that: ‘ECB President Mario Draghi’s bazooka with conditions has clearly beguiled investors because the expectations index jumped up in September in all of the countries and regions surveyed by [us]’.
The research group did add that although institutional investors across the euro zone were significantly more optimistic private investors had not been so quick to react and were, on the whole, remaining fairly cautious in their approach.
For a second consecutive month a sub-index measuring expectations was positively altered, rising from -23.3 in August to -10.8 in September. Although only experiencing a comparatively small rise, a further sub-index tracking current conditions crept to -34.8 in September from -37.0 in August.
However, this renewed confidence may not last. As previously reported by us, the euro has begun to lose the ground it gained following last week’s declaration made by ECB President Mario Draghi and concerns have emerged over the weekend regarding several members of the 17 nation currency block.
Investor sentiment may well falter once more now that economic contraction in France, wavering austerity commitment in Greece and potentially postponed court rulings in Germany have begun to muddy the briefly clear waters of euro zone recovery.
The Pound to Euro exchange rate is currently trading at 1.2490
The Pound to US Dollar exchange rate is currently trading at 1.5961
The Pound to Australian Dollar exchange rate is currently trading at 1.5438
The Euro to US Dollar exchange rate is currently trading at 1.2775
The Euro to Pound exchange rate is currently trading at 0.8004
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