Source: ForexYard
After last week’s better-than-forecast confidence indicators out of the United States, similar reports out of the euro zone now seem to be coming into focus. Tomorrow’s release by ZEW is forecast to show a deep contraction in the region’s economic outlook. Speculators appear to be taking cues from such reports and going short on the region, stoking the flames of the EUR’s current value crisis.
Should tomorrow’s ZEW report on Germany come in as poorly as anticipated, there is a strong likelihood that regional investors will flee risk and move more strongly towards the US dollar (USD). The correlated economic sentiment report on the broader euro zone carries similar implications and traders would do well to anticipate a sharp increase in risk aversion should tomorrow’s data be as dismal as many expect it to be.
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