Euro-Zone Confidence Exceeds Expectations, Euro Focuses on Draghi
- Economic sentiment in the Euro-Zone in June increased to 111.1 from 109.2 in May, beating expectations and pointing to positive economic growth prospects.
- However, for the Euro, the focus in the days ahead will be on the ECB and whether it is preparing to withdraw some of its monetary stimulus.
A raft of data on Euro-Zone confidence released Thursday all came in higher than the consensus forecasts of economists, reinforcing the view that the prospects for economic growth in the region remain positive.
The headline economic sentiment indicator reached 111.1 in June, up from the previous 109.2 and above the consensus forecast of 109.5. However, the Euro was a little easier after the figures as traders in the currency continue to focus on comments by European Central Bank officials rather than economic data.
Indeed, while stronger-than-expected numbers might have been expected to strengthen the currency, it actually slipped back after their release.
Chart: EURUSD Five-Minute Timeframe (June 29 Intraday)
That’s because the Euro is currently being driven by comments from the European Central Bank and, in particular, by those from its President Mario Draghi. Most recently, Draghi has signaled more confidence in economic recovery but also that there’s no immediate prospect of a reduction in its monetary stimulus program. That’s broadly supportive for EURUSD, which has been climbing in recent sessions, and suggests that upward trend could continue for a while yet.
--- Written by Martin Essex, Analyst and Editor
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