The US Dollar firmed against the Euro following the release of a report which showed that investor confidence in Germany declined unexpectedly this month, showing that investors remain cautious over the prospects for the Eurozone’s economic recovery.
According to the Mannheim based ZEW Center for European Economic Research, its index for investor sentiment fell to 61.7 in January, down from the 62 recorded in December. After the data was released the single currency weakened to fall to a low of $1.3525, it later recovered some ground to push up to $1.3532.
A sharper decline was prevented due to a gauge of the current situation surging to a 20-month high of 41.2 in January, well above the previous month’s figure of 32.4. Sentiment in the wider Eurozone also showed signs of improvement with the index rising to 73.3 from 68.3. The figure was also better than the 70.2 economists had forecast.
The Euro is likely to remain under pressure against the US Dollar over the course of the session and could fall on Wednesday if the US posts positive housing and sales data. The next major data releases due for the Eurozone this week comes on Thursday with the publication of a number of PMI reports and the regions latest current account data. The US meanwhile will release new jobless claims and manufacturing PMI data which if positive will send the Dollar higher.
A positive set of US data releases will see investor’s increase their expectations for the Federal Reserve to continue tapering its quantitative easing programme which will provide further support for the currency.
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,1.3540 ,
Euro,,British Pound,0.8234 ,
Euro,,Australian Dollar,1.5418 ,
Euro,,Canadian Dollar,1.4902 ,