Euro Strong On Highly Anticipated GDP Data
The euro climbed against the dollar on Tuesday morning as investors anticipated the results of the German ZEW sentiment survey, due out later in the day. The common currency traded just below $1.33 at $1.3290 at 8:37 GMT on Tuesday morning.
A recent slew of positive data coming out of the bloc has many investors looking toward the future optimistically. After its longest ever recession, the eurozone is expected to post economic growth for the first time when second quarter GDP figures are released on Wednesday.
In addition to the GDP data, the eurozone is also expected to release a host of economic indicators that will provide more insight into the bloc's recovery. Despite growing optimism, investors are still cautious as growth in the region is expected to be tepid at best. The eurozone is still struggling to get its record high unemployment levels under control and mend its financial system.
Germany, Europe's largest economy, will likely be the driving force behind the eurozone's recovery and the upcoming sentiment survey could fuel speculation that the powerhouse economy is back on track. According to Reuters, some analysts see the results of a strong ZEW number pushing the euro as high as $1.34.
The euro could face some pressure as US retail sales readings are forecast to have grown by 0.3 percent in July. Positive data from the US means the likelihood of the Federal Reserve beginning to taper its stimulus spending in September will increase. Should the US central bank cut back on its $85 billion per month bond buying plan, the dollar would spike leaving the euro to play catch up.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.