German business confidence dropped less than expected: a score of 10.2 was reported by ZEW. And current conditions are even better in January: a score of 59.7 was seen, showing more satisfaction than beforehand. Euro-zone inflation numbers were confirmed with 0.2% in the headline number and 0.9% in the core. These are figures for December.
EURUSD is marginally higher but not going anywhere fast.
Only the euro-zone ZEW number disappoints with 22.7 points, lower than last time.
Final inflation numbers for December were expected to confirm the initial read: 0.2% in headline CPI and 0.9% in core inflation y/y. The German ZEW Economic Sentiment carried expectations for a drop from 16.1 to 8.2 points in January, reflecting weaker optimism. However, only a smaller drop was predicted the current conditions component: from 55 to 54 points.
Towards the release, EUR/USD traded around 1.0870, well within the recent range.
The big event for the euro this week is undoubtedly the ECB decision. On one hand, poor inflation and global worries imply more monetary loosening from the ECB. On the other hand, they have already done a lot and there is internal opposition to the fresh moves.
Here are two very different opinions:
- Will Draghi Down the euro this time around?
- Buy EUR/USD Targeting 1.13 – Morgan Stanley Trade Of The Week
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