- Disappointing German ZEW Miss Fails to Rock Euro
- USD Strength Remains Core Factor
- Wall Street Calm After Losing Start to Week
The Euro forex market has been under continued pressure in recent weeks. This has brought it to new lows for the year as it struggles close to 1.15 at times against an extremely strong Dollar. The Euro case has not been helped today by another data miss in Europe, this time from the powerhouse German economic ZEW indicator. Despite this, and it being quiet data day in the US, the main driver has been Dollar strength which has remained solid into this week. On Wall Street, markets are cautious following a late sell-off on Monday.
German Economic Sentiment Fails to Hit Mark
Those forex trading the Euro today were dealt what they would presume to be another blow to the currently troubled market. The Euro, already languishing against a Dollar showing protracted strength, could be further hit today by a disappointing dip in German economic sentiment. As the largest economy in the EU, a lot of focus and weight is often put on Germany as an indication of how the entire region is performing.
On that basis, there will be disappointment as the ZEW economic indicator drops below its previous mark of 26.5 to an October number of 22.3. This significant dip is not only down on September numbers but also below where analysts had expected at 24.0. The reaction of the Euro so far though has not been overly negative though the currency still lays low below 1.16 against the Dollar.
Dollar Power Remains Key Market Driver
Forex brokers will continue looking to the Greenback on Tuesday to assess how the wider market is performing. A general move toward risk aversion always favors the safe-haven Dollar and this has again been evident in recent weeks. Even with no significant data to be released from the US side today, the currency will still control the narrative.
The US Dollar Index is as strong today as it has been in recent weeks and in the last 12 months for that matter. The measure of Dollar strength against a number of other forex currencies is now above 94 in a very strong position. The negative start to the week on Wall Street only furthering the cause for strength in the USD.
Markets Look to Rebound Following Slow Start
Mentioning Wall Street, after the rollercoaster of last week ended on a high, any expectation that such positivity would continue into the new week was dashed at the end of the day yesterday. In the last hour, strong selling was seen across the board to again leave the Dow Jones and other major indices counting losses. The former shed more than 200 points.
Futures were little changed but still pointing in the wrong direction for a turnaround as markets continue to grapple with a reopening economy but one that has been tempered by caution and anxiety of late.