For yesterday’s trading, at least, the Forex market seemed to have moved on from concerns about whether or not Greece will cause problems for the Single Currency. As the rest of the world agonises about the distinction between a “bailout extension” (Eurozone finance ministers’ requirement for Greece) and a “loan extension” (The Greek government’s request), the EURUSD dollar pair action was dominated by the ZEW Economic Sentiment survey report out of Germany.
This private organisation releases these reports on German economic sentiment on a monthly basis, and is highly respected. As can be seen on the chart above, it provided the stimulus for Euro strength yesterday, a strength that has been maintained overnight.
This brings us back to consider what, by any standards, has to be regarded as a very resilient currency. Back in 2008 Greece was the basis for very much larger problems for the Euro. This time round, it seems to be not much more than nuisance value. When one factors in the fact that QE has started in the Eurozone, and that there is a real shooting war right on Europe’s doorstep, in Ukraine, one has to take note of this refusal by the Single Currency to be bowed on the global Forex markets.
German sentiment dominates
The extract above is from the MyFXBook economic calendar for yesterday. It can be seen that the calendar compilers have determined that the ZEW survey results for Germany are likely to have a higher impact on the value of the Euro than the corresponding report for the Eurozone as a whole.
Markets are very pragmatic about these matters. We have characterised Germany as the locomotive of the Eurozone in the past. The Forex market, for now at least, would seem to agree.