In particular, last month’s survey dip to -15.7 was reflective of looming Greek debt restructuring troubles and visible signs of a slowdown in the country’s export market. However, the situation has at least improved in one of the two concerns – with the Greek debt restructure and buyback measure complete. The absence of any real concern over one of the EU’s most indebted nations will no doubt lift German investor confidence for the near term.
In addition, recommitments by both EU leaders and ECB central bankers to the wider Union are likely to ensure an uptick in tomorrow’s report. EU leaders have noted an acceptance of recent Greek measures, while the European Central Bank has entertained the idea of lowering rates next year. Although bad for the longer term currency outlook, the rate cut idea exemplifies how policymakers want to keep the region together and looking ahead to future growth – rather than on fracturing further.
What to Expect
Better than expected results will bolster the EURUSD pair higher, and should be above current estimates of a -11.4 reading. The improvement would stand as the third improvement in the last four months and bolster notions of a recovery. Expect the 1.2900 support to be the springboard to a test of 1.3070 October 5th session high if this happens.
At expected results wouldn’t be that bad either. Should results be in line with expectations, they would still represent an improvement in current investor confidence for the month. The notion would still propel the EURUSD pair higher off of support at 1.2900, towards the 1.3100 psychological figure.
Worse than expected results would be devastating for the single currency. A below -11.4 reading would highlight continued bearishness in the EU’s largest economy, lending to concerns of more complications (both monetarily and economically) early next year. Should this happen, it may prompt a close below 1.2850, lending scope for a decline to 1.2659 November 13th low.