ZEW Economic Index Economic Readings (EUR/USD, EUR/GBP), Many Currencies Have Come Under Pressure As The US Dollar Continues To Strengthen

Summary:

The Euro expectedly reacted poorly to the ZEW indexes economic readings.
EUR/GBP
GBP/AUD came in softer on Tuesday.
GBP/NZD

US Inflation Data will be released on Wednesday

The market is reflecting bearish signals for this currency pair. The Euro expectedly reacted poorly to the ZEW indexes economic readings and is now seeing the EUR/USD currency pair testing parity. The EU region print came in at -53.8, the lowest since November 2011, reiterating the already lowering optimism in the Eurozone. Further events that could negatively affect the Euro further include an increasingly hawkish Federal Reserve, the potential energy crisis lingering over the Eurozone and recessionary fears.

Focus during Wednesday's trading day will be on the US Inflation data release which will give the market further guidance around the U.S economy.

ZEW Economic Index Economic Readings (EUR/USD, EUR/GBP), Many Currencies Have Come Under Pressure As The US Dollar Continues To Strengthen - 1 EUR/USD Price Chart

Euro faces more risks

The market is reflecting mixed signals for this currency pair. The Pound sterling continues to be weighed down by the market's woes around the Euro. The Euro/US Dollar currency pair is testing parity. The pound was supported by the news of Prime Minister Boris Johnson stepping down in the wake of many government officials resigning. The Euro still faces risks going forward.

ZEW Economic Index Economic Readings (EUR/USD, EUR/GBP), Many Currencies Have Come Under Pressure As The US Dollar Continues To Strengthen - 2 EUR/GBP Price Chart

GBP/AUD Currency pair

The pound sterling to Australian Dollar entered the trading week on its front foot with the AUD coming under pressure from numerous other currencies whilst the US Dollar strengthened even against China's Renminbi and risk aversion controlled both the stock and commodity markets. Although the GBP/AUD was softer on Tuesday, it closely resembles the USD pairing against both the GBP and AUD.

ZEW Economic Index Economic Readings (EUR/USD, EUR/GBP), Many Currencies Have Come Under Pressure As The US Dollar Continues To Strengthen - 3 GBP/AUD Price Chart

GBP/NZD

The GBP/NZD currency pair has had a volatile start to the trading week and could see the pound sterling strengthen even more in the coming days if the Reserve Bank of New Zealand (RBNZ) surprises the markets and encourages the NZD to outperform other currencies.

ZEW Economic Index Economic Readings (EUR/USD, EUR/GBP), Many Currencies Have Come Under Pressure As The US Dollar Continues To Strengthen - 4 GBP/NZD Price Chart