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EURUSD Recovers On Improved Eurozone Sentiment

James Boston
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EURUSD Recovers On Improved Eurozone Sentiment

The latest broad range of confidence indicators just published highlights a noticeable pick up in economic sentiment within the Eurozone. Despite still hovering around multi year lows today’s improvements, all be they moderate, bring a welcome end to a downward trend that in the economic climate within the bloc.

The October Consumer Confidence figure has recovered to read at -11.1, this number was anticipated and it represents a pick up from September’s -11.4 reading. The overall Business Climate has registered at 0.05, as expected, posting a gain on the revised 0.02 measurement the previous month. The Economic Sentiment Indicator has improved to 100.7 from a prior reading of 99.9, there was a positive surprise element to this figure as markets had been anticipating a further slide to 99.7 this month. Industrial Confidence has come in at -5.1 following a September recording of -5.5, there was no expectation of any change to this number today. Finally, the Services Sentiment statistic has shown the greatest improvement to read at 4.4 for October, last month’s number was just 3.2 and markets had forecast this to fall further to 3.1 in the latest release.

The improved optimism within the 18 country economic bloc is largely concentrated within the retail, services and construction sectors. Despite a moderate rise in the Industrial Confidence number there is still a strong negative sentiment within the Eurozone’s manufacturing sectors. German industry in particular has been displaying a very pessimistic outlook towards the near term future. Global economic slowing augmented by geopolitical tensions have led to a fall of in Eurozone outward trade, this comes despite a weakening Euro which is serving to mask the true extent of the balance of trade declines. A series of labour disputes in the Eurozone’s largest economy is also proving to be an unwelcome development that is further hampering the German industry.

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