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Euro Advances After German ZEW Economic Sentiment Survey

The euro was trading higher against its major rivals in European deals on Tuesday, erasing early losses, after data showed that German economic confidence rose for the fourth consecutive month to a one-year high in February.

Survey data from the Centre for European Economic Research, ZEW, showed that the economic sentiment index came in at 53, up from 48.4 in January. This was the highest score since last February, when the reading was 55.7.

The assessment of the current situation improved notably in February. The current conditions index rose sharply to 45.5, the highest since last July, from 22.4 in January.

The indicator of economic sentiment for the Eurozone increased by 7.5 points to 52.7 points. Gaining 8.7 points in February, the indicator for the current situation reached a value of minus 48.4 points.

In early Asian deals, the euro slipped on fading hopes for a Greek debt deal, after Greece rejected a euro-area proposal to request a six-month extension of its bailout program.

The eurogroup gave Greece an ultimatum that it should agree to an extension of the current €240 billion bailout by the end of the week, or else it will be cut off from funding that the country needs to avoid a default.

The euro climbed to a 4-day high of 1.1436 against the U.S. dollar, off previous low of 1.1321. The next possible resistance for the euro-greenback pair is seen around the 1.16 zone.

After declining to a 5-day low of 0.7374 against the pound in early deals, the euro firmed to a 4-day high of 0.7429. If the euro-pound pair continues its rise, it may find resistance around the 0.75 mark.

Data from the Office for National Statistics showed that U.K. inflation eased more than expected to a record low in January on falling motor fuel and food prices.

Inflation fell to 0.3 percent in January from 0.5 percent in December. It was forecast to slow to 0.4 percent.

The euro drifted up to a 4-day high of 135.85 against the yen, following an 8-day decline to 133.92 at 7:30 pm ET. On the upside, 137.00 is seen as the euro's next resistance level.

The euro was stuck at near 5-week high of 1.0646 against the Swiss franc, reversing from previous low of 1.0556. At yesterday's close, the pair was worth 1.0574. Continuation of the euro's bullish trend may lead it to a resistance around the 1.2 region.

The euro recovered to 1.5188 against the kiwi, 1.4147 against the loonie and 1.4637 against the aussie, from early more than 3-week low of 1.5075, 1-week lows of 1.4094 and 1.4531, respectively. The euro is likely to challenge resistance around 1.55 against the kiwi, 1.425 against the loonie and 1.47 against the aussie.

Looking ahead, U.S. NAHB housing market index and New York Fed's empire manufacturing survey - both for February, as well as Canada existing home sales for January are due in the New York session.

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