Tuesday, 16 Feb 2010

EUR Bearish after Disappointing Sentiment Reports

The opening of the European market was less than inspiring for an already struggling region. The EUR started the trading day up against the US Dollar, but flat against everything else. However, once Europe opened for trading, a series of negative economic reports pushed the 16-nation single currency back into a bearish posture.

Even though the German ZEW Economic Sentiment report came out better than forecast, the rising trend in Germany did not carry over to the rest of the region which has been hit hardest by the fiscal crises in Greece, Portugal and Spain. The wider Euro-Zone's ZEW sentiment figures were worse than expected with a reading of 40.2 instead of the 42.6 figure being anticipated.

Britain's consumer price indices (CPI and Core CPI) also came out lower than expected, putting a mild damper on the Pound.

With manufacturing and investment figures expected out of the United States, the possibility exists for a down-turn in the greenback should the numbers disappoint. On the other hand, if the Empire State Manufacturing Index and TIC Long-Term Purchases reports come in better than forecast, the USD may continue its bullishness.