Euro Rebounds Off of Lows Despite Lowest Confidence in Three Years
Consumer confidence in the Euro-zone dropped to its lowest reading since August 2009, according to the preliminary release of the July report. The advanced reading showed that confidence dropped to -21.6 from -19.6, below the -20.0 estimate, according to a Bloomberg News survey. A worsening labor market which has seen unemployment levels in some periphery nations (Greece, Spain) shoot up above 20% has eroded sentiment across the continent, which is headed for a steep recession as looming budget cuts and rising taxes (or in tandem, austerity) will hamper spending for some time.
EURUSD 1-minute Chart: July 23, 2012
Charts Created using Marketscope – Prepared by Christopher Vecchio
In reaction to the news, the Euro initially slipped, but given the immense amount of negative sentiment around the globe today, the data market the bottom for the day thus far. The EURUSD rebounded from just under 1.2085 to as high as 1.2128 in the hour or so after the release. The EURUSD touched its lowest exchange rate since June 2010, and with no new measures expected out of Europe in the days ahead as well as a worsening situation in Greece, the EURUSD looks primed to decline below 1.1900 by the end of August.
--- Written by Christopher Vecchio, Currency Analyst
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