Talking Points:
- The Euro was little changed versus the US Dollar
- Eurozone economic sentiment prints 103.0 vs 103.8 expected
- Services sector confidence fell to 9.6 from 10.8 in February
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The Euro was little changed versus the US Dollar (at the time this report was written) after today's Eurozone economic confidence figures came below expectations, declining to the lowest level since February 2015. The Economic Sentiment Indicator fell to 103.0, below the expected 103.8 figure and the prior revised reading of 103.9. The index is compiled from five different indicator surveys including: industrial, services, consumer, retail, and construction. The report said that the deterioration in sentiment was due to lower confidence among consumers as well as managers in the services and construction sectors. Sentiment in the services sector dropped to 9.6 in March from a revised 10.8 print in February, and was below the expected 10.8. Consumer confidence fell to -9.7 as a consequence of growing pessimism among consumers about the future general economic situation. Measures for industrial confidence declined slightly to -4.2 from the revised prior -4.1 as managers’ expectations for production and the current level of orders remained almost unchanged.
The ECB will start to increase bond purchases to 80 billion euros from the prior 60 billion euros this Friday after announcing new stimulus measures earlier this month. As was mentioned recently by DailyFX Chief Currency Strategist John Kicklighter, central banks are steering monetary policy in an effort to bolster confidence, with stimulus by the ECB aimed to reach economic objectives; 2% inflation, or slightly lower, in the ECB’s case. The central bank seems to be in a wait-and-see mode after the latest policy announcement, which may hint that the market saw the figures as having limited impact on possible monetary policy actions, and the Euro was little changed versus the US Dollar.
EUR/USD 5 Minute Chart
