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Euro May Overlook German ZEW Data as Traders Await ECB Meeting

Euro May Overlook German ZEW Data as Traders Await ECB Meeting

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • US Dollar Outperforms on Firming Fed Policy Bets, Yen Falls on Risk Swell
  • Euro May Overlook German ZEW as Traders Await ECB Meeting Outcome
  • See Economic Releases Directly on Your Charts with the DailyFX News App

The US Dollar outperformed in overnight trade, rising as much as 0.3 percent on average against its leading counterparts. The move tracked an advance in front-end Treasury bond yields, suggesting that firming Federal Reserve monetary policy expectations were behind the move.

The New Zealand Dollar bore the brunt of the greenback’s advance, dropping as much as 0.8 percent alongside rates on the island nation’s five-year note, seemingly reflecting erosion in the RBNZ rate hike outlook. We remain short NZDUSD.

The Japanese Yen likewise declined, falling as much as 0.6 percent. Risk trends look to have sparked the selloff. The MSCI Asia Pacific regional benchmark stock index rose 0.4 percent, sapping demand for the safety-linked unit.

January’s German ZEW survey of investor confidence headlines the economic calendar in European trading hours. The forward-looking Expectations index is expected to advance for a third consecutive month, hitting the strongest level since April.

The outcome may not offer meaningful support to the Euro however considering the limited implications of an improvement for monetary policy bets. Investors are also unlikely to be willing to commit to a firm directional bias this week’s much-anticipated ECB rate decision.

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Asia Session

GMTCCYEVENTACTEXPPREV
21:00NZDNZIER Business Opinion Survey (4Q)23-19
22:30AUDANZ Roy Morgan Weekly Consumer Conf113.6-112.0
2:00CNYFixed Assets Ex Rural YTD (YoY) (DEC)15.7%15.7%15.8%
2:00CNYRetail Sales YTD (YoY) (DEC)12.0%12.0%12.0%
2:00CNYRetail Sales (YoY) (DEC)11.9%11.7%11.7%
2:00CNYIndustrial Production YTD (YoY) (DEC)8.3%8.2%8.3%
2:00CNYIndustrial Production (YoY) (DEC)7.9%7.4%7.2%
2:00CNYGDP s.a. (QoQ) (4Q)1.5%1.7%1.9%
2:00CNYGDP (YoY) (4Q)7.3%7.2%7.3%
2:00CNYGDP YTD (YoY) (4Q)7.4%7.3%7.4%
2:07CNYBloomberg GDP Monthly Estimate (DEC)7.07%-6.74%
7:00JPYConvenience Store Sales (YoY) (DEC)--1.7%

European Session

GMTCCYEVENTEXPPREVIMPACT
7:00EURGerman PPI (MoM) (DEC)-0.4%0.0%Low
7:00EURGerman PPI (YoY) (DEC)-1.4%-0.9%Low
10:00EURGerman ZEW Survey (Current Situation) (JAN)13.010.0Medium
10:00EURGerman ZEW Survey (Econ Sentiment) (JAN)40.034.9Medium
10:00EUREurozone ZEW Survey (Econ Sentiment) (JAN)-31.8Medium

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EURUSD1.14111.15041.15551.15971.16481.16901.1783
GBPUSD1.49941.50641.50881.51341.51581.52041.5274

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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