EURUSD fell after the weak German statistics. The major currency pair was thrown off balance by the middle of the week. The current quote for the instrument is 1.1830. Yesterday, the Euro Area and Germany reported on the ZEW Economic Sentiment, which turned out to rather weak and drew attention to the fact that the region’s economic recovery was so good. The indicator showed 63.3 and 61.2 points in July after being 79.8 and 81.3 points for Germany and the Euro Area respectively.
It’s difficult to say what was worse, data from Germany or the Euro Area but there is no escaping the fact that businesses remain very cautious and careful.
After this, there appeared some rumours on the market that the European Central Bank was way behind other global regulators in tightening its monetary policy. However, the statistics do prove that any tightening may be untimely if the economic recovery isn’t systematic.
In this light, no one paid much attention to the Retail Sales report, which showed 4.6% m/m in May, which is better than expected, after being -3.9% m/m in April. The reason for that is a gradual removal of quarantine restrictions in Europe. Later today, investors will switch their attention to the FOMC Meeting Minutes. The document is highly unlikely to offer anything dramatically new but the “greenback” enthusiasts may like an already known piece of news about two rate hikes before the end of 2023.