Euro Ascends as German ZEW Survey Reveals Burgeoning Optimism
THE TAKEAWAY: ZEW survey beats expectations -> Eurozone inflation climbs -> Euro soars to session high
German investor confidence rose in April for a fifth consecutive month, suggesting that economic recovery in Europe’s heavyweight is ever drawing closer. The Euro attained a fresh session high on the news after trading within a tight range during the day’s majority.
Fueling the rise, the Mannheim-based ZEW center said its monthly index of investor and analyst expectations increased to 23.4 from 22.3 in March. The index attempts to predict economic developments six months in advance. The ZEW center added that economic conditions have stabilized, and said it generally expects additional positive developments out of Germany over the next 6 months.
The German economy has resisted recession as ultralow unemployment levels bolster consumer spending and offset a slump in international demand. Even so, today’s outturn surprised some market players given recent concerns over the beleaguered Spanish economy.
Meanwhile, a measure of Euro-area inflation rose unexpectedly today, further complicating the European Central Bank’s mission to coax CPI down below its 2% target rate. A hike in energy prices pushed the reading up to 2.7%, higher than the projected 2.6%.
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