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German ZEW Economic Sentiment Actual 31.1, Expected 20.0, Previous 13.0

Euro-area ZEW Economic Sentiment Actual 28.5, Expected 15.0, Previous 11.8

Release Explanation: The Zentrum fur Europaissche Wirtschaftsforschung (Center for European Economic Research) report measures investor sentiment. “The indicator reflects the difference between the share of Analysts that are optimistic and those that are pessimistic for the expected economic development in the region over the next six months. For example, 60% Optimistic and 40% Pessimistic will lead to a read of +20,” TheLFB-Forex.com Trade Team said.

TheLFB-Forex.com Trade Desk Thoughts: The Zew Economic Sentiment indicator for Germany improved again in May, for the seventh consecutive month, reaching 31.1 points. The index gained 18.1 points in May, from one month earlier, something that helped the index rise above its historical average of 26.2 points. Economic expectations for the Euro-zone increased in April by 16.7 points. The respective indicator now stands at 28.5 points.

The optimism of the financial experts is supported by modest signs of a recovery of the real economy over the last weeks. The strong decline of industrial production, for example, has come to an end and exports and incoming orders have started to rise again.

However, TheLFB-Forex.com Trade Team notes that despite the very strong reads regarding the future expectations, the indicators for the current assessment in Germany and in the Euro-area are still near record low values. In Germany, the current economic situation index is sitting at -92.8, while the similar Euro-area index has reached -93.2

Forex Technical Reaction: The release caused the euro to jump 20 pips, to TheLFB R2 (1.3655), but the move was easily retraced. So far, the euro has gained 80 pips tonight.
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