EUR/USD Higher after July EZ Consumer Confidence Falls Less than Forecast
- EZ July Consumer Confidence falls to -7.9 from -7.2 in June vs expectations of -8.0.
- EUR/USD rises after the advanced July Confidence Report but lacks traction to hold gains ahead of the ECB.
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Consumer confidence deteriorated in July within the Euro Area, the European Commission said on Wednesday. The advance July report showed that sentiment continued downtrending and fell to -7.9 from -7.2 June in the wake of the Brexit Referendum vote that created tremendous uncertainty about the future of the economic bloc. The reading, however, topped market expectations slightly that called for a decline to -8.0.
The UK decision to leave to EU has undoubtedly clouded the economic outlook for the region and that can be reflected in consumer expectations that continues to deteriorate. As a result of the Brexit fallout, it is likely confidence indicators will remain depressed thereby curtailing consumer spending and business investment; ultimately limiting economic activity and slowing the convergence of inflation to the target in the region.
Here are the headline report figures driving the Euro this morning:
- EUR July (Advance): -7.9 versus -8.0% expected, from a revised print of -7.2 in June.
Chart 1: EUR/USD 1-minute Chart Intrday (July 20, 2016)
After the report crossed the wires, EUR/USD broke higher and reached $1.1029 moving in positive territory for the day. However, amid lack of momentum, EUR/USD retraced those gains and at the time of writing, is back into negative terrain, down marginally -0.05% for the session.
-- Written by Diego Colman, DailyFX Research
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