- Clemens Fuest, ZEW President
The single currency was little changed against the U.S. Dollar on Tuesday even despite welcoming fundamental data that showed inflation came in line with analysts' forecasts, while a gauge of German investor confidence soared to the highest level in more than seven years in December.
Consumer prices in the 17-nation bloc climbed 0.9% last month from a year earlier, accelerating from a 0.7% figure reported a month ago. The core measure, which excludes volatile food, energy, alcohol and tobacco prices, advanced 0.9% following a 0.8% gain in October. Despite an improvement inflation still stands well below the ECB official target of 2%. While these figures ease concern that the Eurozone risks a damaging cycle of falling prices, they also suggesting the recovery is very weak and fragile. Negative consumer prices are considered to be a key risk for the economy, as they encourage consumers to put off buying goods in the anticipation of even lower prices.
Also Tuesday, the ZEW Center for European Economic Research said their index of mood among German investors, which aims to predict economic performance in the next six months, soared to 62.0 from 54.6 in November. The measure of current situation improved as well, rising to 32.4 in December, from 28.7 a month earlier.
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