During early trade in Europe, the common currency Euro edged higher, regaining lost ground versus the U.S. Dollar, as investors turn their focus to the German ZEW survey, which measures investors’ sentiment. In Japan, the Yen edged lower ahead of an expected announcement by the Prime Minister of a snap election, and the likely news that a planned rise in Japan’s sales tax is to be put aside for the time being, in an effort to jump start the Japanese economy.
As reported at 8:50 a.m. (GMT) in London, the EUR/USD was trading at $1.2494, a gain of about 0.3% and moving away from Monday’s low. Policy makers at the European Central Bank are likely to ease further if it appears that the Eurozone economy continues to move in a divergent manner from its US counterpart. The USD/JPY was trading at 116.72 Yen, moving close to a 7-year high when the pair hit 117.06 Yen on Monday, following the announcement of disappointing growth.
ZEW Report Surprises to the Upside
Germany’s ZEW releases came out better than expected, across the board; the reading which assesses current sentiment of investors came in at 3.3, better than October’s 3.2 and well above the 1.8 expected while the reading for economic sentiment surprised at 11.5 against expectations of 0.5. The ZEW release for economic sentiment for the Eurozone as a whole was also released with a reading at 11.0 against the 4.3 expected. The improvement in the ZEW numbers should bode well for the Euro in the short term and indeed, in the moments after the release the EUR/USD was trading at $1.2521.
