EUR Brushes Aside Slump in German Consumer Confidence

Going into the European session, German consumer sentiment was in focus ahead of Eurozone consumer confidence late in the session.

German Consumer Sentiment

For January, the GfK Consumer Climate Index slid from a revised -1.8 to -6.8. Economists had forecast a more modest decline to -2.7.

According to the December Survey,

• Both economic and income expectations fell significantly along with the propensity to buy.
• Since the propensity to save increased, the GfK forecasted the marked decline in sentiment for January.
• High COVID-19 cases due to the 4^th wave of the pandemic resulting in further restrictions and significantly increased prices weighed on sentiment.

The sub-Components

• The economic outlook indicator slid by 13.9 points to 17.1.
• Income expectations dropped by 6 points to 6.9 points. Over the last 3-months, the income expectations indicator has lost more than 30 points…
• Propensity to buy fell by 8.9 points to 0.8 points. This was the lowest value since Jan-2021, when it stood at zero.

Market Impact

Ahead of today’s stats, the EUR had fallen to a pre-stat and current day low $1.12733 before finding support.

In response today’s stats, the EUR fell to a post-stat low $1.12761 before rising to a post-stat and current day high $1.13028.

At the time of writing, the EUR was up by 0.18% to $1.12987.

Next Up

Flash Eurozone confidence figures for December will be in focus late in the European session. While the markets will be expecting a decline, a sizeable one could test EUR support.