Euro Sinks to New Lows on Weak German ZEW Survey Data

The euro today booked significant losses against the US dollar following the release of German ZEW survey data for March. The ZEW data triggered a decline that extended from the early European session into the American session as the US dollar gained ground against the single currency.

The EUR/USD currency pair today lost over 90 points to drop from a high of 1.2354 to a low of 1.2262.

The release of the German ZEW survey expectations for March, which dropped significantly to 5.1 from the previous 17.8, and was much lower than the expected 13, is what triggered the pair’s decline. The significant drop was attributed to rising fears of a global trade war pitting the USA against the EU and other nations, which could adversely affect the German economy. The Eurozone ZEW survey of economic sentiment also came in at 13.4, which was much lower than the previous 29.3 print. The only positive print was the ZEW survey of the current situation, which was recorded at 90.7 versus the expected 90.

The currency pair was on track to erase all of yesterday’s gains as demand for the greenback increases. Yesterday’s gains were largely influenced by a Bloomberg report indicating that European Central Bank policymakers were content with investor expectations of an end to quantitative easing later this year followed by rate hikes next year.

The currency pair’s future performance is likely to be influenced by the FOMC rate decision tomorrow and the empty Eurozone economic docket.

The EUR/USD currency pair was trading at 1.2272 as at 16:15 GMT having declined from a high  of 1.2354. The EUR/JPY currency pair was trading at 130.53 having dropped from a high of 131.71.

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