News Column

Euro At 5-week Low Vs US Dollar After German ZEW Economic Sentiment Index

May 13, 2014

CANBERA (Alliance News) - The euro declined to a multi-week low against the US dollar in European deals on Tuesday, as German economic expectations worsened more-than-expected in May, suggesting that Europe's largest economy may not maintain its strong pace of growth.

The economic sentiment index fell to 33.1 in May from 43.2 in April, the Mannheim-based Centre for European Economic Research said. The score was forecast to fall to 40.

On the other hand, the assessment of current economic situation rose 2.6 points to 62.1 in May. The reading was above the 60.5 level forecast by economists.

Economic expectations for the Eurozone also lost ground in May. The respective indicator declined by 6.0 points to 55.2. Meanwhile, the indicator for the current economic situation gained 4.9 points to -25.6 points in May.

Reversing from an early high of 1.3772, the euro declined to a 5-week low of 1.3740 against the greenback. The euro is likely to find support around the 1.37 zone. At yesterday's close, the pair was worth 1.3758.

The euro based back to 140.57 against the yen, following a 5-day high of 140.95 hit at 4:35 am ET. If the euro continues slide, it may find support around the 140.00 zone.

The euro pared early gains against the pound with pair trading around 0.8153, off early 4-day high of 0.8175. On the downside, 0.81 is seen as the next support level for the euro.

The single currency hit 1.2202 versus the Swiss franc shortly after the data. The next possible support for the euro lies around the 1.21 mark.

The euro retreated from an early high of 1.5967 against the NZ dollar, reaching a weekly low of 1.5920. Further weakness may lead the euro to support around the 1.58 level.

The European unit pared gains to 1.4708 against the aussie and 1.4996 against the loonie, after climbing to 4-day highs of 1.4751 and 1.5043, respectively in early deals. The euro may possibly challenge support around 1.46 against the aussie and 1.49 against the loonie.

Looking ahead, US advance retail sales and import price index for April and business inventories for March are due in the New York session.

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Source: Alliance News

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