Eurozone sees positive economic sentiment number but 'not out of woods yet
EUR/USD rose back towards the 1.12 level on Tuesday and is now back trading only modestly lower for the week.
Once again, almost all of the volatility in the main pair is being driven by developments in the US, particularly with regards to the tariffs.
Economic news out of the Euro Area has been relatively light in the past few sessions, although we do note that yesterday’s ZEW economic sentiment number for May did bounce back nicely following the April slump (+11.6 from -18.5), reflecting far less pessimism towards the tariffs.
The common bloc is far from out of the woods just yet, however, and comments from President Trump on Tuesday, where he said that the EU was “nastier than China” does not bode well.
Absent any news on this front, we will be closely monitoring comments from ECB officials in the next few days, with the likes of Nagel, Cipollone and De Guindos all set to deliver remarks.
Author
Matthew Ryan, CFA
Ebury
Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.
