Euro is heading lower today, thanks in large part to the fact that the German ZEW came in below analyst expectations. Even though eurozone home prices were higher, the ZEW’s disappointment is overcoming some of the good news and sending the 18-nation currency lower against some of its major counterparts.
The latest ZEW reading came in at 61.7 for the month of January. This represents a disappointing reading, since many had expected it to come in at 64. The reading indicates that there might be difficulties for Germany, which is the eurozone’s largest economy.
In many cases, the eurozone economy as a whole follows where the German economy leads. If Germany is faltering, there are concerns about what’s next for the entire eurozone economy.
Indeed, even the better data about home prices in the eurozone isn’t helping as much. Even though third quarter (2013) home prices in the currency region rose at their fastest quarterly pace in more than two years, the news about the ZEW is overshadowing this positive development. According to Eurostat, home prices rose 0.6 per cent in the third quarter.
At 14:16 GMT EUR/USD is down to 1.3540 from the open at 1.3565. EUR/GBP is down to 0.8219 from the open at 0.8253. EUR/JPY is up to 141.5060 from the open at 141.3550.
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