The euro received some unusually positive news yesterday on the activity side, as the ZEW surveys came in slightly stronger than expected in Germany (13 vs. 10) while it bounced quite sharply (from nine to 20) in the overall index. the eurozone, says Francesco Pesole, FX analyst at ING.
EUR to stabilize around 1.09 for now
“Those are all soft indicators that the ECB itself has often ignored, but they could contribute to the sense that the negative growth narrative has bottomed out, ultimately dampening dovish expectations.”
“The EUR/USD is predominantly driven by external factors. The substantial drop in oil prices has reduced the scope for a further decline based on market factors, but we still suspect that the positioning ahead of the US elections should favor a weaker EUR/USD.”
“Tomorrow’s ECB meeting may have only a marginal impact on the markets. Our baseline is stabilization around 1.09 for now, but – as mentioned – the balance of risks is tilted to the downside heading into 5 November.”
Source: Fx Street
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