The euro traded flat against the US dollar on Tuesday, following Germany’s upbeat economic sentiment which climbed to its highest since October 2009.
The single European currency traded around $1.35 following ZEW data, trading flat at $1.3499. The euro gained an estimated 1% against the US dollar over the previous week. The pair is expected to hold immediate resistance at the $1.35 level. Market participants are focusing on the anticipating Federal Reserve (Fed) meeting minutes which are expected to be released on Wednesday.
The US dollar index, which measures the strength of the US dollar against a basket of six of its major peers, retreated more than 0.70% after the Fed Chairperson nominee Janet Yellen said she would support the central bank’s quantitative easing (QE) for an extended period until the US economy is stronger. The index edged 0.13% lower, standing at 80.717 points.
“I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” Yellen commented.
Minutes from the Federal Reserve (Fed) from the October 29-30 meeting are expected to be released on Wednesday and could drive the markets this week.
The economic sentiment among German investors and analysts improved for the fourth month in a row in November. The ZEW economic sentiment, which evaluates the economic developments for the six months ahead, rose to 54.6 in November, exceeding analysts’ forecast of 54.0 and up from the previous month’s reading of 52.8.
The Current Situation Indicator stood at 28.7 in November, below analysts’ forecast of 30.8 and October’s reading of 29.7
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