Talking Points
- The ZEW German economic sentiment index came in at 16.6 in January, below the predicted 18.4
- However, the economic institute’s current conditions index came in at 77.3, above the forecast 65.0
- EURUSD fell in response before regaining the ground lost
- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.
EURUSD eased back before recovering its losses after Germany’s ZEW economic institute reported that its economic sentiment index rose to 16.6 in January, above December’s 13.8 but below the 18.4 consensus forecast. ZEW attributed the climb to an “improved economic situation” but added that the data showed a “leap of faith for 2017”.
Its current conditions index rose to 77.3, above both the predicted 65.0 and December’s 63.5 reading. That led EURUSD to weaken, although it then rallied to recover its losses.
Chart: EURUSD 1-Minute Timeframe (January 17, 2017)
The data are not expected to lead to the European Central Bank withdrawing its extensive stimulus program just yet.This week, ECB President Mario Draghi is expected to lay out the reasons why the central bank for the Euro-Zone intends to stick with its stimulus plan decided at the December 8 meeting and will keep pumping money into the economy through its asset-purchase program until at least the end of the year.The ECB is not expected to change its interest rates or other monetary settings when its governing council meets Thursday.
--- Written by Martin Essex, Analyst and Editor
To contact Martin, email him at martin.essex@ig.com
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