EUR/USD Turns Positive as EZ Economic Momentum Continues
- Economic momentum continues to hit new multi-year highs in the Euro-Zone.
- EUR/USD turns positive, just, as worries over the German Election are put aside.
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The latest Euro-Zone Sentix Investor Confidence Indicator hit a new decade high in October, trumping expectations. The indicator rose to 29.7 from a prior 28.2 and expectations of 28.5, as investors brushed off any concerns over the recent German Elections and focussed on the strengthening economy. According to Sentix,
“The economic momentum continues. The overall index for Euroland improves by 1.5 points and reaches a new 10-year high with 29.7 points. Current situation and expectations are improving to a similar extent. The first economic test after the Bundestag elections can be considered successful. The time series for German economy of the "first movers among the leading indicators" are clearly climbing and are promising an unbroken upturn - even under a changed government.”
Chart: EURUSD Hourly Timeframe (October 4 – 9, 2017)
The improving backdrop will please ECB President Mario Draghi as he continues to plan the timetable for tightening monetary policy in the Euro-Zone. Commentary from German officials about the need to pull back on the bond buying program continues as negative rates in the Euro-Zones largest country continue to hit savers. German 2-year bonds currently trade with a negative yield of 0.70% while 10-year Bunds trade at just 0.45%.
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--- Written by Nick Cawley, Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.