Euro Gains with Help of Positive Economic Sentiment

The euro ended yesterday’s trading session with solid gains and is trading sideways during the current session, unsure where to go now. The currency was rising on the back of the surprisingly good European economic sentiment.

The ZEW Indicator of Economic Sentiment for Germany climbed from -3.6 in October to 11.5 in November. The actual figure was far above the predicted reading of 0.9. The Indicator of Economic Sentiment for the Eurozone has jumped from 4.1 to 11.0 this month, also exceeding forecasts by a wide margin.

The euro halted its decline against the dollar on November 7 and was consolidating since then. Prospects for additional monetary stimulus from the European Central Bank still weigh on the common 18-nation currency, but for now the euro is slowly crawling upwards. The shared currency is even stronger against the sterling and the yen — the losers on the Forex market as of now.

EUR/USD climbed from 1.2449 to 1.2533 yesterday and traded at 1.2525 as of 00:14 GMT today. EUR/JPY was near 146.73, trading close to the highest rate since October 2008, after rising from 145.21 to 146.44. EUR/GBP traded at about 0.8018 following the rally from 0.7958 to 0.8016.

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