Forex: EUR/GBP hits 1-year low on fall in German economic sentiment

on Jan 21, 2014
Updated: Oct 21, 2019
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_iNVEZZ.com: Tuesday, January 21th:_ The German ZEW Economic Sentiment Index has fallen this month to 61.7 points from the prior 62, surprising the analysts who’d been expecting a rise to 64. The Current Situation reading was up to 41.2 from the prior 32.4, and again confounding expectations, which had been for a smaller increase to 33.5.

ZEW president Clemens Fuest comments: “For months, the surveyed financial market experts have expected an economic upswing. In this month’s survey the clearly improved assessment of the current economic situation seems to confirm these expectations.”
And ZEW’s Eurozone Economic Sentiment for January was also well up, at 73.3 points from the prior period’s 68.3 and easily beating market forecasts for an increase to 70.2.

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Following these releases the EUR/GBP dropped some 0.15 percent to 0.8224, its lowest point since 11 January of last year, before modest retracement to be currently at 0.8230.
German Finance Minister Wolfgang Schaeuble yesterday urged bankers to use their knowledge to improve international rules aimed at preventing future financial crises.
Schaeuble told around 1,000 commercial and central bankers, politicians and brokers at a Deutsche Boerse reception that regulation could not be ended because financial markets continue to innovate.

He counselled his audience to not “invest your energy and competence only in warding off new regulation, but rather help to find better solutions and to put them in place internationally” and added: “I am asking you simply to pitch in.”
TD Securities chief currency strategist Shaun Osborne says in a FX outlook today that UK unemployment data due out tomorrow could trigger another “leg down in EURGBP”.

Osborne writes that TD Securities is looking for “positive data (unemployment rate dropping 0.2 points to 7.2 percent), bringing the BoE’s seven percent unemployment threshold within reach (possibly as soon as next month)”.
He thinks that “a clear push” beneath the mid 0.82 area should get the EUR/GBP to levels around 0.8150 “at least”.
The CBI’s UK Industrial Trends Survey – Orders is due out at 11.00 UTC today, with forecasts for a drop to 10 points this month from the previous 12.
Resistance levels today: 0.8250, 0.8260 and 0.8280.
Support levels: 0.8235, 0.8225 and 0.8210.

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