EUR/USD Weak as Data Show Confidence in the Euro-Zone Ebbing
- EURUSD trades at a 10-day low on waning confidence and likely lower inflation data.
- ECB governing council member says bond purchases could be adjusted if inflation weakens.
The latest batch of Euro-zone indicators show confidence in the Euro-zone falling in March in three out of the five sectors monitored. These surveys allow comparisons among different countries' business cycles and highlight the current state of health and sentiment of the EU and the euro area economies.
Economic confidence fell to 107.9 from 108 in February and against expectations of 108.3, while the services indicator dropped to 12.7 against a prior, revised, reading of 13.9 and expectations of 14.
The business climate indicator remained steady at 0.82 but missed expectations of 0.87, while industrial confidence fell to 1.2 against February’s reading of 1.3 and market expectations of 1.4.
Consumer confidence remained steady, and met expectations of -5.
The EUR remained weak post-release, hitting a fresh 10-day low after early Spanish and German state inflation data pointed to prices falling in the Euro-zone. The single currency had also weakened on commentary from ECB governing council member Erkki Liikanen who said that the central bank could adjust bond purchases if inflation weakens. The Finn added that current central bank forward guidance is appropriate ahead of the April 27 ECB policy meeting.
Chart: EURUSD Four-Hour Timeframe (March 8 – March 30, 2017).
--- Written by Nick Cawley, Analyst
To contact Nick, email him at Nicholas.firstname.lastname@example.org
Don't trade FX but want to learn more? Read the DailyFX Trading Guides
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.