EUR Strong vs. USD & GBP on Economic Sentiment & CPI

The euro rose against the US dollar and the Great Britain pound today as economic sentiment improved in Germany and the whole eurozone, while inflation accelerated. The currency was weaker versus the Japanese yen.

The ZEW Indicator of Economic Sentiment for Germany improved by 7.4 points to 62.0 in December, the best result since April 2006. The indicator for the eurozone gained 8.1 points to 68.3. Eurozone annual inflation accelerated to 0.9 percent in November from 0.7 percent in October.

The euro was falling against the dollar in the first half of the current trading session on speculations that the Federal Reserve will announce stimulus tapering tomorrow. The dollar also gained strength as the US House of Representatives passed the proposed budget deal that should allow the United States to avoid another fiscal cliff.

EUR/USD was down from 1.3759 to 1.3722 intraday, but bounced to 1.3765 as of 19:55 GMT today. EUR/GBP advanced from 0.8443 to 0.8462, while EUR/JPY fell from 141.73 to 141.31.

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