Forex Market Update: Euro Slips Despite Strong German Economic Data
The euro slipped against the U.S. dollar and the Japanese yen on Tuesday despite some robust German economic data released earlier in the day. The yen, meanwhile, edged higher against the dollar.
The euro initially gained on Tuesday after a report showed that sentiment among German investors and analysts rose in February. The ZEW’s index of German analyst and investor sentiment rose to the highest level since April 2010, according to the data released on Tuesday.
Speaking to Reuters, Wolfgang Franz, President of ZEW, said that financial market experts have made their peace with the weak fourth quarter of 2012 and in their opinion, the German economy faces less of a headwind from the euro crisis than throughout the last months.
Shortly after the better than expected economic data the euro rose to $1.3374. However, the single currency failed to hold on to its gains. At last check, it was down 0.2% to 1.3332 against the dollar. Against the yen, the euro was trading 0.3% lower at 124.69.
Richard Wiltshire, Chief FX Broker at ETX Capital, told Reuters that the ZEW gave the euro a knee-jerk lift but its come off again. Wiltshire noted that the data was pretty good but it is still not clear indication that the euro zone is out of the woods, plus the Italian elections could be weighing.
The euro had fallen sharply last week after a report showed that the euro zone economy shrank 0.6% in the fourth quarter of 2012. The data was worse than expected.
The yen, meanwhile, edged higher against the dollar on Tuesday after Taro Aso, Japan’s Finance Minister, said that he was not considering foreign bond purchases.
At last check, the dollar was trading at 93.52 against the yen. On Monday, the greenback had risen to 94.22 yen.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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