German ZEW Economic Sentiment Index improves to 39.3 in October vs. 40.5 expected
- Germany’s ZEW Economic Sentiment Index rises to 39.3 in October.
- EUR/USD hovers near 1.1550 after German and Eurozone ZEW surveys.
The headline German ZEW Economic Sentiment Index rose to 39.3 in October from 37.3 in September, compared to the market forecast of 40.5.
The Current Situation Index worsened to -80 in the same period, as against September’s -76.4. Markets predicted a -75 reading.
Market reaction
The EUR/USD pair maintains the offered tone near 1.1550 after the downbeat German and Eurozone ZEW Surveys. The pair is trading 0.11% lower on the day, as of writing.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | 0.46% | -0.12% | 0.19% | 0.94% | 0.65% | -0.06% | |
| EUR | -0.10% | 0.36% | -0.21% | 0.08% | 0.88% | 0.56% | -0.15% | |
| GBP | -0.46% | -0.36% | -0.57% | -0.26% | 0.51% | 0.24% | -0.50% | |
| JPY | 0.12% | 0.21% | 0.57% | 0.32% | 1.04% | 0.74% | 0.02% | |
| CAD | -0.19% | -0.08% | 0.26% | -0.32% | 0.79% | 0.47% | -0.24% | |
| AUD | -0.94% | -0.88% | -0.51% | -1.04% | -0.79% | -0.32% | -1.03% | |
| NZD | -0.65% | -0.56% | -0.24% | -0.74% | -0.47% | 0.32% | -0.71% | |
| CHF | 0.06% | 0.15% | 0.50% | -0.02% | 0.24% | 1.03% | 0.71% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
This section below was published at 07:20 GMT as a preview of the German ZEW Survey.
German ZEW Survey Overview
The Zentrum für Europäische Wirtschaftsforschung (ZEW) will release its German Economic Sentiment Index and the Current Situation Index at 09:00 GMT later on Tuesday.
The ZEW Survey – Economic Sentiment Index is expected to come in at 40.5 in October, against the 37.3 reading that came in September. Meanwhile, the Current Situation Sub-Index is expected to improve to -75.0 in the reported month, up from the previous reading of -76.4.
How could the German ZEW Survey affect EUR/USD?
The EUR/USD pair may receive some support if German ZEW Survey data come better-than-expected. Any downbeat would strengthen the downward pressure on the pair, with ongoing political unrest in France. Traders also await the speech from US Federal Reserve (Fed) Chair Jerome Powell later in the day.
President Emmanuel Macron reappointed Sebastien Lecornu as Prime Minister, who has since formed a new cabinet. However, opposition leaders Marine Le Pen and Eric Ciotti have already filed a no-confidence motion in an attempt to oust Lecornu’s government. Furthermore, Lecornu will present the draft 2026 budget to his new cabinet on Tuesday.
Germany’s final inflation data for September did not able to put any impact on the EUR/USD pair, with Harmonized Index of Consumer Prices (HICP) rising 2.4% year-over-year, as expected. The monthly inflation remained consistent at 0.2% in September.
Technically, the EUR/USD pair hovers around 1.1570 at the time of writing. The bearish bias prevails as the 14-day Relative Strength Index (RSI) remains below the 50 level and prompts the pair to test the two-month low of 1.1542.
On the upside, the primary barrier lies at the nine-day Exponential Moving Average (EMA) of 1.1627, followed by the 50-day EMA at 1.1671. A break above these levels would improve the price momentum and support the EUR/USD pair to approach the monthly high of 1.1778.
German economy FAQs
The German economy has a significant impact on the Euro due to its status as the largest economy within the Eurozone. Germany's economic performance, its GDP, employment, and inflation, can greatly influence the overall stability and confidence in the Euro. As Germany's economy strengthens, it can bolster the Euro's value, while the opposite is true if it weakens. Overall, the German economy plays a crucial role in shaping the Euro's strength and perception in global markets.
Germany is the largest economy in the Eurozone and therefore an influential actor in the region. During the Eurozone sovereign debt crisis in 2009-12, Germany was pivotal in setting up various stability funds to bail out debtor countries. It took a leadership role in the implementation of the 'Fiscal Compact' following the crisis – a set of more stringent rules to manage member states’ finances and punish ‘debt sinners’. Germany spearheaded a culture of ‘Financial Stability’ and the German economic model has been widely used as a blueprint for economic growth by fellow Eurozone members.
Bunds are bonds issued by the German government. Like all bonds they pay holders a regular interest payment, or coupon, followed by the full value of the loan, or principal, at maturity. Because Germany has the largest economy in the Eurozone, Bunds are used as a benchmark for other European government bonds. Long-term Bunds are viewed as a solid, risk-free investment as they are backed by the full faith and credit of the German nation. For this reason they are treated as a safe-haven by investors – gaining in value in times of crisis, whilst falling during periods of prosperity.
German Bund Yields measure the annual return an investor can expect from holding German government bonds, or Bunds. Like other bonds, Bunds pay holders interest at regular intervals, called the ‘coupon’, followed by the full value of the bond at maturity. Whilst the coupon is fixed, the Yield varies as it takes into account changes in the bond's price, and it is therefore considered a more accurate reflection of return. A decline in the bund's price raises the coupon as a percentage of the loan, resulting in a higher Yield and vice versa for a rise. This explains why Bund Yields move inversely to prices.
The Bundesbank is the central bank of Germany. It plays a key role in implementing monetary policy within Germany, and central banks in the region more broadly. Its goal is price stability, or keeping inflation low and predictable. It is responsible for ensuring the smooth operation of payment systems in Germany and participates in the oversight of financial institutions. The Bundesbank has a reputation for being conservative, prioritizing the fight against inflation over economic growth. It has been influential in the setup and policy of the European Central Bank (ECB).
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
