The euro was relatively firm today following the release of unexpectedly poor eurozone investor confidence print. While the shared 19-nation currency fell versus some of stronger rivals, like the Great Britain pound, it managed to gain on many other most-traded counterparts.
The Sentix investor confidence for the eurozone slumped from 5.3 to -3.3 in June. Analysts were expecting a far better figure of 2.3. The report blamed the resumption of trade wars for the slump:
As soon as the hopeful data of the sentix economic index had been published in May, the US president made a mistake in investors’ calculations. At the latest since the US government prohibited US companies from doing business with the Chinese telecom supplier Huawei, it has become clear that a “cold” trade war is threatening to become a “hot” one. This development has pulled investors out of their upswing hopes and led to considerable setbacks in the sentix economic indices in all regions of the world. For the Euro zone, the overall index drops from 5.3 to -3.3 points.
While the domestic news was bad for the euro, the overall market sentiment remained rather positive following the reports about the deal between the United States and Mexico that should prevent a tariff war. Prospects for an interest rate cut from the Federal Reserve were also helping the common currency of the eurozone, especially against the US dollar.
EUR/USD edged up from 1.1311 to 1.1317 as of 13:38 GMT today. EUR/CHF jumped from 1.1195 to 1.1232. At the same time, EUR/GBP went down from 0.8916 to 0.8903.
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