The euro achieved some gains on Tuesday against the US dollar after the gains it also recorded on Monday and rose by 0.12% at approximately 7:15 a.m. GMT.
While the German Consumer Climate data from GfK did not support the euro to achieve greater gains, with the very slow decline in negative sentiment, even though this was already better than expectations, the markets seem to be counting on a bigger surprise than that.
Consumer sentiment in Germany continued to recover slightly for the second month in a row this March after its sudden decline last January.
While one of the most important factors in boosting sentiment this month was the decline in the willingness to save – which is still at very high levels – although the willingness to buy remains low with a slight improvement in economic and income expectations, according to GfK.
While consumer expert, Rolf Bürkl, from the Nuremberg Institute for Market Decisions (NIM), commented on today’s figures by saying that levels of optimism are still low due to weak confidence in development in the German economy.
While he noted that wage growth and labor market stability were important to support consumer sentiment.
The low levels of German consumer optimism today come after a previous series of data that lacked any indication of the economy’s ability to restore growth in the foreseeable future in light of weak demand and the state of uncertainty due to the surrounding risks, both from the political and geopolitical side, in addition to the monetary side.
It appears that the consumer is still counting on facilitating monetary conditions to enhance their purchasing power, in addition to the calming of fears clouding the economy. The European Central Bank is expected to cut interest rates for the first-time next June, followed by two more cuts for the rest of this year.
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