Weak ZEW figures boost EUR/USD

The hardly surprising news that ZEW sentiment has been eroded due to Crimean fears, and the knock-on affects that EU-backed sanctions might cause, has helped ease the EUR/USD lower.

Yesterday’s shot across the bows of Russia by the US and EU is a forewarning of what further actions might be taken.

One hurdle that has been cleared today for the euro is that the German Constitutional Court has confirmed the legality of the eurozone’s bailout fund. It would have been a blow to the currency if this had failed to happen.

Attention for EUR/USD traders will now shift to Wednesday evening’s Federal Open Market Committee statement. Markets will be trying to gauge the latest thinking of Federal Reserve chair Janet Yellen and her members, and the future timeline for further reductions to the US debt-purchasing scheme. Although not the consensus, the percentage of market watchers now predicting that a further $10 billion will be cut has increased over the last week.

The trend for EUR/USD is still bullish, and the pair continues to make new highs not seen since November 2011, as it looks to continue its way towards the physiological 1.400 level.  

Spot FX EUR/USD chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts