THE TAKEAWAY: Euro-zone consumer confidence confirmed at -24.6 -> Economic sentiment drops to 86.1 -> Euro trading higher
Euro-zone consumer confidence was confirmed at a new 3-year low in August, according to the European Commission’s final estimate. The indicator was reported at -24.6 versus -21.5 in July; the area’s consumer confidence has not been positive since 2001.
The Euro-zone economic sentiment indicator dropped to 86.1 in August, lower than the 87.5 expected and 87.9 in July. Economic confidence was worst in Spain, down 4.9 in August, while a 0.6 improvement was seen in the Netherlands. The business climate indicator was reported at -1.21 in the Euro-zone, lower than the expected -1.30 and the -1.27 prior month’s indicator. Industrial confidence dropped .3 to -15.3 in August, while services confidence dropped 2.3 to -10.8.
The Euro-zone economy has been negatively affected by the debt crisis, and measures to help solve the crisis like the ECB plan to purchase the debt of struggling countries or the creation of the permanent ESM bailout fund are unlikely to be decided upon until at least September.
Lower economic indicators are usually currency negative, but the Euro was not significantly affected by the release. EURUSD is trading higher in today’s trading following the announcement by Chinese Premiere Wen that his country will buy more European bonds. Resistance could be provided by a month-long upward trading channel, currently near 1.2600.
EURUSD 15-minute: August 30, 2012
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