Euro weakens against US dollar ahead of German ZEW Sentiment Survey

Another uneventful overnight session with most major pairings confined to narrow ranges. Euro against dollar traded 1.3090-1.3115 for the most part and GBP/USD 16230-1.6255. The only data release came from the Reserve Bank of Australia’s monetary policy minutes which focused on the appreciation of the domestic currency, as well as slowing Chinese demand and falling commodity prices. The RBA implied a reduction in interest rates may be on the cards as according to the minutes “The current assessment of the inflation outlook continued to provide scope to adjust policy in response to any significant deterioration in the outlook for growth,”. The Australian dollar printed a low of 1.0440 before quickly recovering.

Today we will see the release of German ZEW Economic Sentiment, a leading indicator of economic health in which German institutional investors and analysts quantify their six-month economic outlook. Analysts forecast a figure of -19.2, an improvement from -25.5 last month. However, the single currency has retreated from its recent highs against the US dollar and Japanese yen this morning over fears that the data may add to signs to Europe’s weakening growth prospects. UK inflationary data is released at 9.30am this morning with the economic sentiment indicator due at 10.00am and US Current Account data at 1.30pm . UK CPI inflation is forecasted to edge down from 2.6% to 2.5% and the US current account to improve by $10bn to -$126bn.

EUR/USD

Support 1.3050 | Resistance 1.3220

USD/JPY

Support 78.10 | Resistance 79.05

GBP/USD

Support 1.6170 | Resistance 1.6300