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.
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