Euro ZEW Survey Suggests Brexit Inhibits a More Optimistic Outlook
- Euro-Zone ZEW Survey Economic Sentiment down to 16.8 vs 21.5 prior
- German ZEW Survey Economic Sentiment at 6.4 vs 12.0 expected
- Euro little changed versus the US Dollar
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The Euro was little changed versus the US Dollar (at the time this report was written) after today’s Euro-Zone ZEW Survey showed financial market experts' sentiment concerning the Euro-Zone’s economy is less optimistic. The Euro-Zone’s sentiment figure printed 16.8, which was below the prior 21.5. The Current Situation Assessment rose slightly to -9.2 in the Euro-Zone from the prior -12.1.
The German ZEW Survey of Economic Sentiment index fell to 6.4 from the prior reading of 11.2, and was below expectations of a 12.0 print. The German Current Situation figure rose to 53.1 from the prior 47.7 reading, above the expected 49.0 figure. A reading above 0.0 indicates optimism, while below indicates pessimism.
Looking into the press release, ZEW said that the strong growth of the German economy in Q1’16 appears to have surprised the financial market experts, who do not seem not to expect the economic situation to improve at the same pace going forward. Uncertainties regarding developments such as a possible Brexit currently inhibit a more optimistic outlook, ZEW remarked.
With Brexit and Fed rate hike speculation the main drivers at the moment, it seems the market interpreted the ZEW figures as not sufficient to generate a significant move, and the Euro was little changed versus the US Dollar.
The DailyFX Speculative Sentiment Index (SSI) is showing that about 50.4% of FXCM’s traders are long the EUR/USD at the time of writing, meaning that a sentiment “flip” has taken place in the pair. The previous 4 flips resulted in bursts higher on the exchange rate.
You can find more info about the DailyFX SSI indicator here.
EURUSD 5-Minute Chart: May24, 2016
--- Written by Oded Shimoni, DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.