Euro Lower As German ZEW Economic Confidence Falls To 8-Month Low
July 16 2019 - 2:44AM
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The euro was lower against its most major counterparts in the
European session on Tuesday, as German economic confidence weakened
to an eight-month low in July, supporting hopes for additional
monetary stimulus from the European Central Bank in coming
months.
Survey data from the ZEW-Leibniz Centre for European Economic
Research showed that the economic confidence index declined to
-24.5 in July from -21.1 in June. This was the lowest score since
November 2018. The expected reading was -22.
The current conditions index fell to -1.1 in July from 7.8 in
June. The expected score was 5.
Preliminary data from Eurostat showed that Eurozone's trade
surplus grew in May, led by a rebound in exports, while imports
decreased.
The seasonally adjusted trade surplus rose to EUR 20.2 billion
from EUR 15.7 billion in April. Economists had forecast a surplus
of EUR 17.5 billion.
Speaking in Paris, ECB Governing Council member Francois
Villeroy de Galhau told that central bank is "data dependent" and
not market dependent.
Even though policymakers "take account of market indications,"
they must not be market reliant. That means the ECB should not rely
"too exclusively for inflation expectations on market-based
measures."
"We are data dependent and I say this in particular for the ECB:
in our coming Governing Council meetings, we will assess actual
economic data and we will act accordingly if and when needed," he
added.
The currency was steady against its major counterparts in the
Asian session, excepting the yen.
The euro slipped to a 6-day low of 1.1231 against the greenback,
from a high of 1.1263 touched at 6:45 pm ET. The next possible
support for the euro is seen around the 1.11 level.
The European currency declined to near a 4-week low of 121.18
against the yen, compared to Monday's closing value of 121.49. The
euro is seen finding support around the 119.00 region.
The euro fell to 1.1057 against the franc, its weakest since
June 20. On the downside, 1.08 is possibly seen as the next support
level for the euro.
The European currency declined to a 4-day low of 1.4656 against
the loonie, while reaching 1.5971 against the aussie, its lowest
level since May 8. This follows an early high of 1.6010 against the
aussie and a 4-day high of 1.4702 against the loonie for the euro.
The euro is poised to find support around 1.44 against the loonie
and 1.56 against the aussie.
The euro slid to 1.6697 against the kiwi for the first time
since April 29. If the euro extends decline, 1.64 is possibly seen
as its next support level.
Data from Statistics New Zealand showed that New Zealand
consumer prices rose 0.6 percent on quarter in the second quarter
of 2019.
That was in line with expectations and up from 0.1 percent in
the previous three months.
In contrast, the euro advanced to more than a 6-month high of
0.9028 against the pound from yesterday's closing value of 0.8994.
The euro is likely to target resistance around the 0.92 mark.
Data from the Office for National Statistics showed that the UK
unemployment rate remained unchanged at 44-year low in three months
to May and wages grew at the fastest pace in 11 years.
The unemployment rate remained unchanged at 3.8 percent in three
months to May, in line with expectations. This was the lowest since
the final quarter of 1974.
In today's events, Federal Reserve Governor Michelle Bowman will
deliver remarks at a Fed Listens event in Atlanta at 8:15 am
ET.
In the New York session, U.S. retail sales, industrial
production and import price index - all for June, business
inventories for May and NAHB housing market index for July will be
out.
At 1:00 pm ET, Federal Reserve Chair Jerome Powell will give a
speech titled "Aspects of Monetary Policy in the Post-Crisis Era"
at the French G7 Presidency 2019 in Paris.
Federal Reserve Bank of Chicago President Charles Evans is set
to speak in a television appearance on CNBC at 3:00 pm ET.
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